<html><body><P>American Enterprise Institute</P> <P>April 8, 2008</P> <P>[Edited transcript from audio tapes]</P> <P><BR> <TABLE cellSpacing=1 cellPadding=1 width="100%" border=0> <TBODY> <TR> <TD> <DIV class=BodyText>8:45 a.m. </DIV></TD> <TD> <DIV class=BodyText>Registration</DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>9:00  </DIV></TD> <TD> <DIV class=BodyText><EM>Introduction</EM>:  </DIV></TD> <TD> <DIV class=BodyText>Danielle Pletka, AEI</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Henry Sokolski, Nonproliferation Policy Education Center</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>9:15   </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><STRONG>Panel I: After Iran and North Korea: The Next Nuclear Challenges</STRONG> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Panelists</EM>: </DIV></TD> <TD> <DIV class=BodyText>James Acton, Kings College London</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Robert J. Einhorn, Center for Strategic and International Studies</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Sharon Squassoni, Carnegie Endowment for International Peace</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Bruno Tertrais, Fondation pour la Recherche Stratégique</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Moderator</EM>: </DIV></TD> <TD> <DIV class=BodyText>Danielle Pletka, AEI</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>10:30   </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><STRONG>Panel II: The Indian Nuclear Deal: What Should Be Done in 2008?</STRONG></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Panelists</EM>:  </DIV></TD> <TD> <DIV class=BodyText>Daryl Kimball, Arms Control Association</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>David Trachtenberg</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Rohit Tripathi, Young India </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Moderator</EM>: </DIV></TD> <TD> <DIV class=BodyText>Henry Sokolski, Nonproliferation Policy Education Center</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>12:00p.m. </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Luncheon</DIV></DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>1:00  </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><STRONG>Panel III: Beyond the NPT: What s Needed?</STRONG></DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Panelists</EM>:  </DIV></TD> <TD> <DIV class=BodyText>J. D. Crouch, National Institute for Public Policy</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>George Perkovich, Carnegie Endowment for International Peace</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText>Henry Sokolski, Nonproliferation Policy Education Center</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText><EM>Moderator</EM>: </DIV></TD> <TD> <DIV class=BodyText>Danielle Pletka, AEI</DIV></TD></TR> <TR> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD> <TD> <DIV class=BodyText> </DIV></TD></TR> <TR> <TD> <DIV class=BodyText>2:30   </DIV></TD> <TD> <DIV class=BodyText> <DIV class=BodyText>Adjournment</DIV></DIV></TD></TR></TBODY></TABLE></P> <P> </P> <P>Proceedings:</P> <P><BR>Panel I: After Iran and North Korea: The Next Nuclear Challenges</P> <P>Danielle Pletka:  Good morning, everybody.  I'm Danielle Pletka.  I'm the vice president for Foreign and Defense Policy Studies here at the American Enterprise Institute.  I'm really delighted, first of all, to see everybody here today for this all-day conference on The Crisis in Nonproliferation and How We Can Meet the Challenge.   I'm especially grateful to Henry Sokolski and the Nonproliferation Education Center, which arranged this conference with us and contributed so much.</P> <P>What brought us to this conference were a number of things.  Among them, a creeping observation that the issue of nonproliferation, not as we addressed it specifically on the question of Iran or of North Korea or of crises of the moment, but the issue of nonproliferation in general seems to be very much on the back-burner. That not only the nonproliferation regimes that we have come to take for granted as the bulwarks of international security, such as the Nuclear Nonproliferation Treaty, have begun to crumble, and I would say worse than begun to crumble, have, in fact, become enablers for countries like Iran and others to become proliferators, to develop nuclear weapons program under the safety net, if you will, of a legal regime and then turn around and say, Yeah, not so much.  Thank you very much.  Now we have a nuclear weapon.  Goodbye.   </P> <P>This seems to me to be a model that worked for North Korea; it may well work for Iran and, once it has worked for them, could possibly work for others.  And that we have as a nation - and I would say, also, even internationally - stood back and watched this and said, That is a shame, and not really done anything about it.  More specifically, however, on the question not of threats but of nuclear cooperation and the like, again, you see that the United States has really changed positions in the Bush administration and has headed in a different direction than we have been headed for many, many years.  </P> <P>We have agreed in principle to a nuclear cooperation agreement with a country that is not in the NPT India.  We have looked away as a country like Pakistan has continued its nuclear weapons program and, again, I think that that sends a very clear signal to other countries, whether it is Iran or it is Saudi Arabia or it is Egypt or Syria, that, in fact, things are different and that our view of the old rules is that they do not really matter that much anymore; they are really not relevant.  And if we like you, well, okay, we will sign a nuclear cooperation agreement with you, India.  But if we do not like you then, well, perhaps things will not go as you would hope.</P> <P>This is not the way to run the world because although it would be okay if we were choosing based on who I liked, it is not necessarily okay based on, say, the next President -- who they like or who the Congress likes.  Anyway, you get a sense of the capriciousness of it.  In any case, based on all of these swirling ideas and concerns, we thought it would be worthwhile to bring together some true experts and I think that we are not here to have a sort of political debate; we are not here to talk about yes sanctions , no sanctions , yes or no to India 1-2-3 - although I'm certain that our panelists will have particular opinions - but, rather, to talk about the issues and how the United States ought to look forward in trying to confront these challenges - what should the regimes be. </P> <P>And we have taken three different approaches to it.  I think it will be evident.  I will talk a little bit about our panelists.  I ll sit down to moderate, but let me relinquish the dais in order to let Henry Sokolski make a brief introduction as well.  And then we will move on quickly from there.  So thank you very much for being here.  Henry?</P> <P>Henry Sokolski:  Good morning.  Judging from the numbers here on a bleak Tuesday morning, it is hard to see anything but interest in these topics.  Some of the panelists are going to share a research that MPEC Commission -- and actually we had a meeting last month in Prague and so it is especially pleasant to be able to showcase their work in a broader audience.</P> <P>Recapturing some of the points that Dany made, you know, I see some faces that date back to when I first came to Washington and a little before.  And I like to think that where we are right now with the spread of nuclear weapons capabilities is not that different from the 70s in some respects.  Like a chronic disease, every time there is a welling up of interest in nuclear power the 50s, the 70s and now the diplomatic community has a very hard time trying to figure out how to deal with this without making the world, frankly, a lot riskier.  And, you know, the three approaches that we have, both on the left and right, are really a celebration of half-thoughts, to be blunt; I d like to kind of push beyond them.</P> <P>Three of them that come to mind is - one is, well, we are going to go to hell in a hand basket anyway.  Should we not just take advantage as best we can?  I call this the armed restraint view, which is no rules, just right.  What you do is you see how you can manage things by handing things out.  You say you are sort of following the rules but you do not really care about the rules so much as helping friends as you understand them and hoping that you can kind of put pressure on your adversaries.  This sort of was the approach prior to First World War.  It did not work out so well.</P> <P>Another idea is, well, let s not argue about rights; let s just say everybody has a right to do everything, including getting right up to the edge and getting bombs.  And what we will do is we will try to bribe them.  By the way, looking at the framework and all the permutations to that on what we are going to do in Iran, all I can say on that front is: good luck, it has not been too successful so far.  </P> <P>And then, I guess, there is just generally the idea that if we push nuclear power hard enough with enough subsidies, kind of like Atoms for Peace in the Eisenhower era, it will block out the bad end; this is hope against all experience.  And so today what we are going to try to do is take a look at what we see as the problem sets going forward because, obviously, it is not the 70s; it is much later.  Things have changed to some extent.</P> <P>And then the second thing we are going to do is try to think about what kinds of approaches might make more sense than the three things I just raised.  Let me end on a happy note.  I do not think we have to fill our buckets up with kerosene and rush to the smoldering fire and try to put it out that way.  I think we can do better in a lot of respects, and the first thing is to slow down and think about what we are doing.  It is good time to do that.  We are going to get a new President and I do not know whether that is going to help or not, but it is a good time to think about what we ought to be doing differently.  On that note, I think we should begin.</P> <P>Danielle Pletka:  Thank you very much, Henry.  Let us move quickly to our first panel, which is, perhaps, the most headline-grabbing of our sessions - After Iran and North Korea:  The Next Nuclear Challenges.   I'm expecting to hear from each of our panelists who, in fact, is next as the nuclear challenge and I await with baited breath.  I have got a couple of different contenders that I think are out there.</P> <P>On our panel today -- and I'm going to go and introduce them in alphabetical order.  You do have their full biographies in your packets and I recommend those to you.  But just in brief, James Acton is a lecturer at Kings College in London in the Center for Science and Security Studies.  And he is conducting research into, and advising the government of Norway on, technical and political aspects of verification of nuclear disarmament, something about which the United States has a great interest.</P> <P>Robert Einhorn is a senior advisor at the Center for Strategic and International Studies in their international security program.  He works on a broad range of issues arms control, nonproliferation.  Of course, among them, prior to joining CSIS, he served in the U.S. for what 20, 30, 40 years?</P> <P>Robert J. Einhorn:  Twenty-nine.</P> <P>Danielle Pletka:  Twenty-nine.  I felt like we have spent at least 20 of those in briefings together -- was leaving as the assistant secretary for nonproliferation at the Department of State.  We have also with us Sharon Squassoni, who is a senior associate at the Carnegie Endowment for International Peace in their nonproliferation program, and she works on - it is kind of obvious, I guess - on nonproliferation issues, arms control, and national security questions for them and has written prolifically on the questions before us today.</P> <P>And finally, Bruno Tertrais is a senior research fellow at the Fondation pour la Recherche Stratégique excuse me; it is a little early in the morning.  He is also a lecturer in world politics at the Institut d études politiques de Paris and a well-known European expert on nonproliferation questions.  I'm not going to take up any more time in chat, having had my time before the microphone, except to advice of two housekeeping issues.</P> <P>The first relating to myself - because I'm very confused about scheduling I'm going to leave in the middle of this panel without any offense to my panelists and none should be taken; at least, I ll try not to.  But I have to go up to Capitol Hill to a hearing on Iran, and one of my colleagues will take over and take your questions.  And the second is that on our second panel, Tom Donnelly is not going to be with us today.  He had to go to Canada and we are lucky enough to be joined by Dave Trachtenberg, formerly of the Department of Defense, who will be an important and valuable addition to the second panel.  So the order that we have is Bob Einhorn, Bruno Tertrais, Sharon Squassoni, and James Acton.  Bob, thank you for being here.  </P> <P>Robert J. Einhorn:  Dany, thank you very much and thanks to AEI for including me on this panel.  What this panel is supposed to do is look at nonproliferation challenges beyond North Korea and Iran.  Now, we could speculate on which country is maybe next to seek membership in the nuclear club and we can do that in discussion.  I'm not going to focus on that specifically; I would like to look at three generic proliferation challenges, I think, we are going to be facing over the next several years.</P> <P>The first is impeding the acquisition by additional countries of sensitive fuel cycle capabilities, namely, uranium enrichment or plutonium reprocessing capabilities; second challenge deterring countries that nonetheless acquire fuel cycle capabilities from turning their latent nuclear weapon capabilities into actual nuclear programs.  And the third challenge reducing incentives for U.S. friends and allies around the world to seek their own nuclear deterrence.</P> <P>First, I ll focus on impeding the proliferation of enrichment and reprocessing facilities.  Now, such dual use facilities, as I'm sure you all know, could be used both to produce fuel for several nuclear reactors as well as to produce highly enriched uranium and separated plutonium for nuclear bombs.  And that is why the United States has tried for decades, and with some considerable success, to prevent the spread of these fuel cycle capabilities.  But if the much-predicted nuclear power renaissance actually materializes, then we are going to see a substantial increase in demand for nuclear fuel and especially for enriched uranium.  And a significant number of countries may seek the ability to produce such nuclear fuel indigenously.</P> <P>Now, fortunately, the market provides disincentives for countries to get into the fuel production business.  It is much cheaper to buy fuel from foreign suppliers than to make it themselves, and this is especially true for countries now getting into the nuclear power business.  Countries considering the production of enriched uranium for export will find themselves at a huge commercial disadvantage, a huge competitive disadvantage, vis-à-vis highly efficient suppliers like Uranco, which is the German-Dutch-British consortium.  Uranco has been in the enrichment business for a long time and produces very efficient machines.  </P> <P>Still, countries will do things for non-economic reasons.  For example, they may be willing to pay a high premium for their own fuel supplies to help with energy security or, less benignly, they may want their own fuel cycle capability to produce nuclear weapons or, at least, to have the option to produce nuclear weapons.</P> <P>We need to take steps that reinforce the economic disincentives for acquiring fuel cycle facilities and expose the motives for countries that insist on pursuing patently uneconomic fuel cycle choices.  One of these steps is to develop a backup fuel supply arrangement that can provide assurance to countries embarking on their own nuclear power programs that as long as they are in compliance with their nonproliferation obligations, they would have reliable access to reactor fuel.  Such a fuel supply assurance -- and as most of you know, this idea is now under active consideration by the U.S., the IEA and other countries.  But such a fuel supply assurance will help undercut the energy security rationale for acquiring an indigenous enrichment capability.</P> <P>In addition to reducing the incentive for countries to seek their own fuel cycle capabilities, we should also make it more difficult for them to buy sensitive technologies.  And this means strengthening the Nuclear Suppliers Group controls on the transfer of enrichment and reprocessing technologies by member governments.  It also means eradicating black market networks like a black market network established by Pakistani former scientist AQ Khan, which was a principal source of enriched technology for the nuclear weapons programs of Libya, Iran, and North Korea.  But despite our best efforts to reduce both supply and demand, some countries are likely to succeed in acquiring their own fuel cycle capabilities.  </P> <P>And once they succeed in putting in place the necessary technical infrastructure to produce fissile material, they will have a latent nuclear weapons capability.  I see a latent nuclear weapons capability as the ability at a future time of their choosing to break out and produce nuclear weapons in a relatively short period of time.  Depending on their technical capabilities and how much preparation they do in advance, these countries with latent nuclear weapons capability could produce nuclear weapons in anywhere from 6 to 24 months after breaking out.</P> <P>Now, countries could break out in two different ways.  One way would be to produce plenty of low-enriched non-weapons-usable uranium under IEA safeguards, then withdraw from the NPT, kick out the international inspectors, re-enrich the low-enriched uranium to weapons-grade highly enriched uranium and start building nuclear weapons.  The other way would be for countries to take advantage of their experience with the overt enrichment facility, overt fuel cycle facility, and then build clandestine facilities for the covert production of fissile materials and nuclear weapons.</P> <P>Now a world with increasing numbers of latent nuclear weapon states would be a very unstable world, even if very few of those states actually intended to have nuclear weapons.  Anticipating a possible breakout by others, perhaps regional rivals, countries might feel compelled to acquire breakout capabilities of their own, or even to acquire nuclear weapons. And this dynamic perhaps is already underway in the Middle East.  Obviously, the best solution would be to prevent additional countries from having fuel cycle and, therefore, breakout capabilities.  But where that is not achievable, we have the second challenge I want to address, and that is deterring countries that have latent nuclear weapons capabilities from exercising their breakout potential. </P> <P>Now we should try to deter both possible breakout scenarios withdrawal from the NPT and pursuing a covert weapons program - and we should enhance deterrence by greatly increasing the political risks involved in breaking out.  The NPT allows a party to withdraw by giving 60 days advance notice and simply asserting that remaining in the treaty would jeopardize their supreme national interests.  To help discourage withdrawals, the U.N. Security Council or the NPT parties collectively, or, perhaps, both of them, should decide that any state providing a 90-day withdrawal notice would be required, first, to go before the Security Council to justify its withdrawal; second, to accept highly intrusive verification measures similar to those imposed on Iraq in the fall of 2002 to prove that it had not already embarked on a nuclear weapons program.  And third, to place all existing nuclear facilities and materials under IEA safeguards in perpetuity so they could not be legally used to support a nuclear weapons program.</P> <P>To help deter a covert breakout scenario, it would be important to increase both the likelihood and the perceived cause of getting caught cheating.  To increase the likelihood of detection, the IEA s verification authority should be strengthened.  And to this end the Nuclear Suppliers Group should require non-nuclear weapon states with fuel cycle programs to adhere to the additional protocol as a condition of nuclear supply.  But deterring a covert breakout is not just a matter of increasing the risks of detection.  Would-be cheaters must believe that they would pay a high price if cheating is detected.  </P> <P>However, the mild sanctions adopted in the case of North Korea and Iran send the wrong signal to possible future violators.  The P5 should agree on an initial set of penalties that would be imposed automatically on countries that are found by the IAEA board to be in breach of their nonproliferation obligations.  Now, adopting such penalties on a country neutral basis before particular issues arise might be somewhat easier for the P5 to reach agreement.</P> <P>Now, regardless of whether we can prevent countries from acquiring fuel cycle capabilities or from exercising their breakout capabilities, we will face a third challenge in coming years and that is reducing incentives for U.S. friends and allies around the world to acquire their own nuclear deterrence.  Several friends of the United States are concerned about the nuclear programs of North Korea and Iran.  In the Middle East that includes Saudi Arabia, Egypt, and Turkey; in East Asia, that, of course, includes Japan and South Korea.  </P> <P>Now, we need to give high priority in the few years ahead to persuading these countries that their security can be protected without the need for them to acquire their own nuclear weapons.  That means doing what we can to reinforce the credibility of U.S. security assurances and, particularly, America s nuclear umbrella.  In the wake of North Korea s October 2006 nuclear test, Secretary Rice traveled to Tokyo and explicitly affirmed U.S. extended deterrent to Japan, and the Japanese were very grateful with this reaffirmation.</P> <P>It also means boosting defense capabilities by transferring conventional military systems to our friends, cooperating with them in missile and air defenses, and maintaining a strong U.S. military presence in their regions.  We should also make clear to our friends that we do not want them to go nuclear.  Of course, this should be obvious.  But the Bush administration has often conveyed the impression that proliferation by hostile regimes is bad, and proliferation by friends is not-so-bad and may be even good.  The U.S.-India civil nuclear cooperation deal, in my view, tended to reinforce that impression.  As a result, some of our friends around the world may believe that we would understand or at least be tolerant if they decided to go nuclear.  I think we should disabuse them of this expectation.</P> <P>In conclusion, I think there is a tendency today to assume that the North Korean and Iranian cases will trigger nuclear chain reactions in their regions and that lots of countries will start moving toward nuclear weapons, or at least hedging their bets.  Now, clearly, there are substantial risks that this may happen but acquiring nuclear weapons or even a nuclear weapons option is not so quick or easy, especially for countries that, today, lack the necessary technical infrastructure and expertise.  For several countries that may now be contemplating the nuclear option, the path ahead may look more technically challenging, politically risky, and ultimately, uncertain than we may recognize. </P> <P>So in my view, nuclear cascades or nuclear chain reactions are not inevitable.  But whatever the likelihood may be of having future chain reactions, we need to do all we can to lower that likelihood even further.  And we can do so by preventing the spread of fuel cycle capabilities, by deterring breakout by countries that have latent capabilities, and by reassuring our friends and allies around the world that they do not need nuclear weapons to safeguard their security.  Thank you.</P> <P>Danielle Pletka:  Thank you very much, Bob.  I think, Bruno, you are next.  Thank you.</P> <P>Bruno Tertrais:  Merci, Danielle.  Okay, what is the problem?  I think the question that was posed to us - the question that lends itself to different scenarios, that is, if you should ask yourself after Iran and North Korea, what?  How urgent and how hard would it be?  My first answer is that it depends on what we mean by after Iran and after North Korea. </P> <P>There are several different situations in which the nonproliferation scene will be very different; that is, do we have an Iran which is under the threshold, at the threshold, or over the threshold?  You know, after Iran means three different things in these three different scenarios.  Do we have - well, we will have a nuclear North Korea, unfortunately.  Whether it keeps its symbolic capability or whether it proceeds with new tests and whether it gains truly operational capability mixed the picture changes, the scenarios change.  Whether North Korea and Iran are actively providing nuclear technology to other countries is also a key parameter.</P> <P>So my point is to say: when we say after Iran and North Korea, what?  And how urgent and how hard will it be it depends on the kind of nuclear Iran and nuclear North Korea that we have.  The consequence of a nuclear Iran is a topic that has been discussed widely and intensively over the years, including here.  I want to emphasize one point, which is not always very well-understood in this city.  I mean that is the fact that the European involvement was so strong on Iran, including because it was the future and it is the future of the NPT which is at stake, and there is still, today, consensus in Europe to say that the NPT is and should remain a key political norm to make the spread of nuclear weapons more difficult. </P> <P>So the fact that the Europeans are still actively engaged in the management of the Iranian nuclear crisis is not only because we view it as a potential threat to us and to the Middle East but also because the future of the NPT is at stake.  Of course, the NPT is not a barrier in itself to proliferation for everybody but it is and it will be from some of our key friends and allies, including Japan, for instance.  It would be very different where Japan would see the nuclear option very differently, whether we live in a world where the NPT remains a global norm or whether the NPT does not exist anymore.  So that was my first one depends on what you mean by after Iran and North Korea. </P> <P>My second point is something that Bob alluded to.  Frankly, I do not see any realistic scenario where the next proliferation wave is a high-speed process.  It will be a slow-motion process.  Any new nuclear proliferation wave is very likely to be a slow-motion process, and Bob has alluded to that.  A few countries -- money is going to take a lot of time for them to build the necessary infrastructures; the legal dimension and to train personnel, et cetera.  You are all familiar with that.</P> <P>I would mention an additional factor.  The fact that most suppliers are primarily interested in countries which already have that nuclear infrastructure -- that is a key point.  In my country, for instance, the fact that there is an active policy of telling if your nonproliferation credentials are good, then you deserve nuclear power generators.  This, by the way, was something that President Sarkozy announced before he was elected and I think he believes strongly in that.  But Areva is not going to sell nuclear reactors everywhere in the Middle East, and I think the Emirates deal the deal with the United Arab Emirates - is likely to be an exception rather than a norm.</P> <P>By the way, it is interesting because when Sarkozy was candidate for the election, the poster child was supposed to be Algeria.  When he announced his willingness to have a big nuclear energy initiative - that was in March 2007 - he said, You know, Algeria should be the first to benefit.   Algeria was supposed to be the poster child.  Now, surprise, surprise! Reality takes precedence over a big concept and those who actually benefit are countries which have the money, are seen as reliable, et cetera.  The Emirates has the money and is seen as reliable.  The Algeria has less money; it is seen as less reliable.  So, again, the Emirates are likely to be, in my personal view, the exception rather than the norm.</P> <P>Finally, there is a sort of technical argument.  I'm well aware of the technical discussion about weapon-grade plutonium, fuel-grade, reactor-grade, et cetera.  But, still, power reactors that will be sold will not lend themselves as easily as other types of reactors to military usage.  I know that Henry and other people are going to blast me if I say I know the arguments.  I keep saying that I know the technical discussion but, still, some reactors and some plutonium lend itself much more easily to military hazards than other.</P> <P>Still - and that would be my third point I would worry about some research reactors.  The discussion about nonproliferation in the past five years has tended to focus on centrifugation and the potential risk by power reactors.  We should not forget I know that experts do not forget it - but I think I would emphasize that we should keep worrying about potential military use of some research reactors.  I mean, some countries such as Egypt, Indonesia, Algeria have research reactors of a power or of a type which can under certain conditions be used for a breakout option.  </P> <P>So it would be interesting to see whether Iran keeps building and it finishes early the Arak reactor because as you know, it is a bomb factory, basically.  Whether or not this is something that will once again appear as an attractive option - we are back to the 70s.  Well, in the 70s indeed, plutonium reprocessing was seen as the primary proliferation. </P> <P>Okay, what do we do now?  I'm not going to agree with a lot of things that Bob has said.  I'm not going to repeat the points but I would say, first, that whatever the scenarios that I have outlined when I began, the lessons that will be drawn from the Iranian crisis and from the North Korean crisis will bear heavily on our decision making.  Let me just give you a few ideas. I will focus here on the demand side; that is, on dissuading -- not only deterring but also dissuading countries from going nuclear.</P> <P>A few points on raising the costs we will need to build on the arguably slow momentum but the momentum required in the United Nations because, over the past two years, the fact that there have been several rounds of sanctions dedicated to try to stop nuclear proliferation is something significant even though they have been too slow and not strong enough - I agree with all that.  But the fact is that the U.N. has started taking serious sanctions about nuclear proliferation issues.  So how to build on that.</P> <P>The problem with sanctions is that they often work but they work much too slowly.  You know, we cannot wait 20 years for a country to give up WMD or nuclear weapons; we just do not have the time.  Generally, nuclear programs go faster than the efficiency of sanctions or the diplomatic route.  So I like the Goldschmidt proposals; I like the proposal just made by Bob Einhorn.  What do we do in case of a country found non-compliant?  They should be immediate and unfitted, access to its nuclear site.  A country withdrawing should be held accountable for its past violations.  I think these are critical ideas that need to be put into practice sooner rather than later.</P> <P>On Europe s side, I think Europe is not using its instruments or weapons as much as it could.  I'm a strong believer of a much more restrictive interpretation of what we call conditionality; the fact that we have all these trade and cooperation agreements with various countries around the world.  Well, in principle these countries are supposed to abide with the nonproliferation norm.  We should have a much more restrictive and stronger interpretation of those.  For instance, concerning the mandatory implication of the additional protocol, that is our fault, I mean that is our responsibility.  We have to also - the fact that we are a big commercial power with a lot of economic power of attraction means that we can make better use of this.</P> <P>Finally, on cooperation with India - and I say India because, obviously, it is not India per se; it is the fact that it is a country outside the NPT with whom there is a lot of interest in nuclear energy cooperation, that is, not only in this country but, as you know, also in my country.  And personally, I know that India will be discussed later on but, here, this:  Iran has been looking at India very carefully.  Iran has been looking at North Korea and Iran has been looking at India.  And if I was an Iranian, the way we are dealing now with India would indicate to me as an Iranian that, hey, well, if we ride the storm 10 years from now, we would be recognized as a nuclear power with all the benefits.  They may be wrong but I cannot blame them for thinking that way.  </P> <P>So I think that the Iranian perceptions of our dealings with India are an important component of the way they define their strategy.  And for me that in itself - there are other reasons to doubt the wisdom of major cooperation deal with India now, but I would defer any significant nuclear cooperation agreement with India for later talk.  I have great admiration and respect for India.  I do view it as a major strategic partner for Europe as an allied country, but it is the not the time for a major cooperation deal.</P> <P>That was about the cost and benefits.  On the benefit side, there are things that we can do better and I will conclude with that.  On security guarantees I will just say two things.  First of all, that I'm not sure that Article 5 is enough to reassure Turkey of the collective Western security commitment to the safety and security of their country.  Article 5 is not in itself enough and there may be a time where we reaffirm in a stronger way our NATO security guarantee to Turkey.  It has had some reasons, good or bad, to doubt that security commitment.  It needs to be reaffirmed.</P> <P>On the Gulf countries I wonder whether it might be time at some point to do something that involves the three countries, which had already security commitments in the region; that is, the United States, the United Kingdom, and France.  I mean my own country has three security agreements; their contents are not public but they are security commitments that involve Kuwait, the Emirates, and Qatar.  There may be a point where it would be useful to have some form of not collective security guarantee - that is too strong a word - but some form of a collective statement by those Western countries, which are already heavily involved in the region to say to the effect that - to show how we care about their security in case Iran was to continue with this nuclear program.</P> <P>Lastly, I would say two things.  First of all that on the status dimension of going nuclear, if we were ever to agree one day on an enlargement of the Security Council, it may make incentives for proliferation being less potent, so to say.  I doubt that we will ever agree on enlarging the Security Council.  I doubt it.  But if we were to show that you can be a major world player without nuclear weapons - that is, having permanent membership without having nuclear weapons - that may be an important step forward to prevent the incentives for going nuclear.  </P> <P>And finally, I would also be in favor of at least the three if not the five -- I would like the five to do it - and, perhaps others, too - to state more strongly that we view nuclear weapons as only weapons of deterrence, well, that they could only be used in extreme circumstances but they are not weapons of prestigious status.  And the fact that we are moving in a direction where there will be less [indiscernible] in the world of nuclear weapons that I think that would be a good thing.  So let me close.  Oh, hi Danielle.  You have changed.  </P> <P>Chris Griffin:  Yes, I left and got a haircut.  Sorry, my name is Chris Griffin.  I m a research fellow here in Asian Studies and we are doing a last minute substitution. Sharon Squassoni will be our last speaker and thank you very much for your patience.</P> <P>Sharon Squassoni:  Next to last.  We have got James after.  Thank you.  Thanks to AEI and also the NPEC for hosting this conference.  I m going to do something a little different, which is to brief us.  Henry mentioned on some of the research I have been doing funded by NPEC on nuclear expansion and proliferation.  Since time is short, I m going to stick to presenting a few maps.  This is part of a longer briefing, which is both available in the Carnegie website and on the Nonproliferation Policy Education Center s website.</P> <P>So, first, what I m not going to do.  I m not going to engage in a theological debate about nuclear energy in the U.S.  If you have listened to some of the radio shows and television things, usually it devolves into how many people died at Three- Mile Island and whether or not you support a plutonium economy.  I m also not going to debate the proliferation impact or evils of light water power reactors.  But what I am going to do is look at this bigger issue of one of the many policy reversals of the Bush administration, which is to launch headlong into supporting nuclear power not just in the U.S. but globally.  </P> <P>We have the Global Nuclear Energy Partnership.  We have the Bush-Putin July 2007 initiative and various statements under the G8 supporting nuclear energy in the name of climate change.  And at the same time, as both Bob and Bruno mentioned, we are stepping up efforts to restrict this sensitive nuclear technology.  So here you have basically the heart of the -- or the crux of the matter under the NPT:  How do you ensure the peaceful uses of nuclear energy?  </P> <P>But it is at a great period of tension right now.  And so what I m going to do with this briefing is if we believe there is going to be a nuclear renaissance, what is it going to look like?  And will we like that picture?  And so today I m not going to give you projections but I m going to show you maps of different scenarios.  And there is more information on the websites and in the longer briefings on those scenarios but, just very briefly, there are three.</P> <P>The first -- I will show you what nuclear energy looks like today, nuclear power reactor capacity.  Then I m going to show you what a realistic growth scenario is for 2030, which is based on Energy Information Administration numbers.  Then I m going to show you what I call the wildly optimistic scenario, which is what states have said they are going to do.  And one note:  China recently revised upwards its reactor capacity figures from 40 gigawatts - basically, 40 very big reactors - to 60 by 2020.  So you can see it as a moving target.  </P> <P>And the last one is akin to a global climate change scenario:  How many reactors would you need to build if you wanted to accomplish one of those Pacala-Socolow wedges, that is, to reduce 1/7th, or to provide 1/7th of the solution for global climate change?  </P> <P>So, very briefly, I do not call it a renaissance or a revival because I think that is a very U.S.-centric approach; I would like to call it nuclear energy enthusiasm.  But what has happened is since 2005 more than 25 states have announced new plans for nuclear power.  And part of it lies in this idea that nuclear power is one of the solutions to global warming.  But, also, a part of it is this notion of greater energy security and you particularly see that, ironically enough, in the Middle East.  But still, nuclear energy has not resolved really or solved the four basic dilemmas; you have proliferation, cost, safety, and waste.  Although many would argue that it has made inroads in safety.  </P> <P>So very briefly this is a snapshot.  Nuclear energy now provides 16% of global electricity demand.  We have about 31 countries operating over 400 reactors.  Eleven countries engage in uranium enrichment.  Five countries separate plutonium commercially; that is, they separate the spent fuel from the reactors.  And no country yet has a geologic repository for nuclear waste.  </P> <P>So this is -- you can see the scenarios one, two, and three.  Even if you say that nuclear energy stays the same in terms of its market share of electricity, as you go up you are going to see more countries with reactors, more countries with enrichment.  It is an open question whether more countries will be separating plutonium, although the U.S. presently intends to do that.  And also, it is not clear how the progress on geologic repositories moves forward, although my guess is that Finland and Sweden will be before the U.S.  </P> <P>All right.  So this is -- and again, this is a graphic depiction so it is not entirely to scale but we did the best we could.  Most of the nuclear energy in the world -- you can see Europe, U.S., Japan.  Enrichment -- these are the commercial enrichment capabilities and this is the reprocessing capabilities.  So, do we care where these nuclear power reactors are installed?  Well, if you care from an energy security perspective, you need to know where the oil, gas, coal, and uranium is.  If you care from a global climate change perspective, you have to ask where are the carbon emissions.  So where does it make the most sense if you are going to make the biggest impact on global climate change?  </P> <P>So the industrial world leads in the total amount of carbon emissions but the developing world, particularly India and China, lead in growth in those carbon emissions.  Half of those states - I think it is 27 - that are interested in developing nuclear power capacity are in the Middle East.  Are they doing this for global climate change reasons, energy security, or hedging their bets against Iran?  </P> <P>In terms of technical capabilities -- so we talked about where it might go and the maps are still to come.  Do we care if these countries develop nuclear power reactors?  Well, I think you can make an excellent case that when you have a nuclear power base and -- of course, the issue that Bruno raised about research reactors is quite critical.  But it helps develop a scientific and technological base that can be used if the country so desires a nuclear weapons program.  Plus it raises issues of security and control of nuclear material.  The question is how many power reactors do you need to have before it makes sense to engage in enrichment and reprocessing?  </P> <P>I m not even going to touch reprocessing today because that, again, is a big debate.  But an enrichment -- we look at Iran and we say, It does not make sense.  Bushehr is not even operating.   Will it make sense at 10 gigawatts?  Will it make sense at 20 gigawatts?  And for those of you who are not familiar with reactor lingo, one gigawatt is a thousand megawatts; it is basically the standard for reactors.  So that 20 gigawatts is about 20 power reactors.  </P> <P>And the last part of this:  Do technical capabilities matter?  Our efforts right now to restrict technology transfer, I would argue, are piecemeal.  There are more states now; it is ironic that GNEP was supposed to sort of restrict the states interested in enrichment and reprocessing.  Well, actually the initial wave is that more states are interested at least in enrichment.  And you have to ask the questions:  What rules and institutions do we have?  Are they adequate for managing significant growth in nuclear energy?</P> <P>Okay, so this is -- and I m sorry if you cannot see in the back.  Again, these are in the websites.  The purple countries are the states that are now interested in nuclear energy and the key is the darker the color is, the more serious they are.  They have -- so the darkest purple is they have established some kind of baseline, some kind of -- taken steps.  </P> <P>So here we get to the maps.  This is the map that you saw before - nuclear energy as it stands today.  The first scenario you will see is the conservative growth forecast for 2030.  You can see some states are growing more than others.  The red is the proposed expansion; this is what states say they want to do.  The red -- the filled-in red circles are the new states, those that do not have nuclear power now but want it.  And then the green circles are what you need for global climate change to make a small dent.</P> <P>So I m going to do that same map just for the new nuclear power states.  So here, you can get a better look.  This is a little bit more to scale for 2030 and here is the green scenario, which is roughly based on the MIT 2003 Future of Nuclear Power study.  Okay, so obviously a big increase in nuclear power has implications for enrichment.  On the left-hand side, you see millions of separative work unit capacity.  It is very difficult to translate these into numbers of plants because you just do not know.  But you can see the baseline -- the orange baseline right now.  There are about 11 countries and there are about 17 enrichment plants of various sizes.  And so as you go up to the scenarios you can see the numbers get very large and you have got to ask where is that enrichment capacity going to be developed.   </P> <P>Now, also, you have to make an assumption of what kinds of reactors will be sold out there.  Ninety percent of all power reactors right now are light water reactors, which require enriched uranium.  But there is a question:  Will India decide that it wants to export pressurized heavy water reactors, CANDU-type reactors that do not require enriched uranium?  And that changes.  And also if you go in to fast -- you know, reactors that burn plutonium -- that also changes.  </P> <P>Okay, so my conclusions, briefly.  The expansion plans, as I view them, are unrealistic.  I do not think that we are going to see a nuclear expansion of the type that, say, the World Nuclear Association envisions.  When you talk to U.S. nuclear industry people, when they say a renaissance they mean 4 to 8 reactors in the next, maybe, 10 years.  And I heard something on NPR that I have been dying to use it; they were talking about the stock market and saying, The new leveling is the new up.   So the new -- so just building some reactors in the U.S. is the new up.  That is the new renaissance.  </P> <P>Electricity demand is expected to really skyrocket and so it is going to be tough for nuclear energy even to keep its current share of electricity generation.  But the context in which all of this is happening is very encouraging.  So even if you do not get a huge expansion, you may have some states in proliferation, in regions of proliferation concern in the Middle East and Asia that may go ahead with their plans.  Enrichment and reprocessing is not yet off the table and the message from the U.S. right now under the Global Nuclear Energy Partnership Program is that reprocessing is necessary for an advanced fuel cycle.  And we hear the same message from the Chinese recently on their cooperation with Areva which is, Yes, we need reprocessing help on the backend of the fuel cycle for an independent nuclear program.   </P> <P>Bruno raises the question:  Without a solution to Iran, how far can you really progress on restricting enrichment?  There are very practical effects to a big nuclear expansion.  You could have massive flows of sensitive material; you could have new nuclear suppliers like China, South Korea, and India.  And very big IEA safeguards implications, both in terms of budget and people.  </P> <P>So my bottom line is you need to manage the risks now, whether it is through government-to-government cooperation or vendor-to-vendor -- reactor-vendor -- you know, the industry cooperation.  I do not think it is enough to provide just incentives for states to forego enrichment and reprocessing.  And although there are some positive steps - for example, the UAE s recent statement where they said they were going to forego enrichment and reprocessing - I think, probably, the only lasting solution is going to somehow get a handle on multilateral facilities.  And that is take the prestige away from these national facilities, especially in sensitive -- in this sensitive nuclear area.  Thank you.  </P> <P>James Acton:  Thanks very much.  This is what I m going to talk about is another one of these projects that Henry and MPEC is sponsoring.  So I would just like to acknowledge Henry and thank the organizers for today for bringing me out.</P> <P>Like Sharon, I would like to talk about the implications of the nuclear renaissance for proliferation.  One of the -- what we have heard today from other speakers and what you hear in the broader debate is developing nuclear power technology is difficult; it is extremely difficult.  And then everybody stops talking about the difficulties of developing nuclear power technology and goes on to talk about issues of intent.  And, indeed, there was the report that was drawn up for the Senate Foreign Relations Committee that some of you may have seen that looked at proliferation drivers in the Middle East and asked:  What is likely to make these countries go nuclear and what can U.S. policy do to stop them? </P> <P>What I would like to do is to focus today on the issue of capabilities; to take a look at how difficult it will be for the states that have expressed an interest in new nuclear power stations within the context of the nuclear renaissance to develop those power stations.  So I want to point out, really, there are two distinct capabilities questions, of which I m only going to focus on one today.  The first is the question that I have already outlined:  What challenges do states that wish to develop nuclear power technology face?  How plausible, how easy is it likely to be?  And today I m going to focus on the Middle East and I m going to talk principally about Turkey and Saudi Arabia.  What challenges do those countries face?  </P> <P>The separate capabilities question to that, which I m not going to talk about but is an important question to at least flag up that it exists is:  To what extent does civilian nuclear technology further proliferation?  And this ties in to some fairly complicated technical questions about light water reactor technology and the plutonium produced thereof.  But, again, like everybody else I m going to happily skip over that debate.</P> <P>Because of the time limit today, I m just going to compare Turkey and Saudi Arabia but our research also covers Egypt but I m not going to have time to talk about that.  And then what I m going to do at the end of the talk is give you what I believe are some of the policy implications of my observations about these state capabilities.  </P> <P>I think it is worth pointing out, as a number of speakers have said, we have been here before.  Turkey, for instance, commissioned its first feasibility study into nuclear power technology in 1967 and, since then, it has had a large number of talks, which have sometimes culminated in an agreement to develop nuclear power technology.  It had its discussions with Sweden in the late 1970s.  In the mid-1980s, Turkey talked to Canada, Germany, and the United States.  In the late 1980s, Turkey was talking to Argentina.  In the late 1990s, it was talking to Canada, Germany, and France.  </P> <P>So the question that I m tapping into: is it going to be different this time around?  Is there any reason to suppose that Turkey or Saudi Arabia, which has had a much less developed power program but has nevertheless expressed interest since the 1970s - are they going to be able to develop reactor technology this time around?  </P> <P>Well, for the purposes of debate let us make it as easy for these countries as it can possibly be.  Let us assume that they are going to contract with an external supplier to build a turn-key reactor; that is, literally, to say, a reactor that the external supplier is going to build, hand over the ignition key on day one and then the host country can turn it on and the electricity is going to flow into the grid.  Let us also assume that these countries are going to buy their fresh fuel from the international market, thereby not needing enrichment or reprocessing technology.  And let us also assume that the supplier of the fuel has agreed to take back the spent fuel.  This is not a prediction of what these countries are going to do and I want to be very -- I want to mark this out.  This is the model which would make it easiest for them and then let us assume that they go down this model and see how hard or easy it will be.  This is not a prediction about what these countries are going to be.</P> <P>And specifically today I would like to focus on the staffing requirements and I would like to focus on the regulation requirements.  So by the way of staffing, running a nuclear reactor - and do not forget this is on a turn-key contract so we are assuming the external suppliers are going to come in and know how to pour the concrete and build the reactor and do everything else that, actually, suppliers are finding quite difficult at the moment, but that is not the host state s problem - you are going to need between about 200 and 1000 personnel to run a one-gigawatt reactor.  You might use a lot more than that in practice, but 200 to 1000 personnel is about the right ballpark figure.  </P> <P>You are going to need personnel with skills right across all of the disciplines needed for operating a nuclear reactor.  You are going to need people who are actually reactor operators, those who are trained in radiation protection and health and safety, emergency planning.  The list goes on and on and on and I m not going to read the whole one out here today.  But on top of that, you are also going to need your personnel to have had experience.  For reactor operators, for instance, you ideally want people with three years experience running a reactor somewhere else in the world.  </P> <P>So against that backdrop, let us ask where is Turkey today and where is Saudi today.  Well, in terms of actual -- neither country have power reactors, as we have heard from Sharon.  Turkey has one operating research reactor and that is a smallish 250 kilowatt reactor.  And that -- looking at just from what we can find in the open source literature about that, that research reactor has six staff and two operators.  Now, obviously, you can cycle staff through that facility.  But a facility that has six staff and two operators is still quite a long way below the 200-to-1,000 that you are looking for.  </P> <P>The next indicator in Turkey beyond actual extant reactors is Turkey s activities in other fuel cycle areas.  Now, I have assumed that if Turkey goes down this model, it would be buying its fuel and the supplier would be taking back the fuel.  So the fact that Turkey has some degree of conversion going on there or in the past is not directly relevant; it does not give you direct skills that will be useful for running a nuclear reactor.  But it does give you suitably skilled trained personnel who would then be suitable for retraining.  So a country that has lots of nuclear activity going on will have a generally high nuclear-skills-base and the people involved in those other activities are going to be able to be retrained.  </P> <P>And Turkey actually has had some degree of activity across the whole of the rest of the fuel cycle.  Now, it has had conversion labs in the past; it has had fuel fabrication labs.  On the reprocessing side it may have just been bench-scale scientific experiments.  But there is this general level of competence with nuclear issues in Turkey that, for instance, Saudi certainly does not have.  </P> <P>Turkey s real strength, though, is probably in its university sector and its state-sponsored research center.  Turkey has -- there are 15 universities we have identified from the open source literature which have conducted significant teaching and/or research activities that are relevant to a nuclear power station.  There are nine state-sponsored nuclear research institutions in Turkey.  And, perhaps, most importantly, the Turkish Atomic Energy Authority has very strong interconnections between the universities and between these different research institutions.  And it is able to give Turkey s nuclear research a strong central direction and a strong focus to it, which from a Turkish perspective might give you some hope that it has the capabilities of training all of the people at universities and giving them suitable experience before they can go on and run nuclear reactors.  </P> <P>Saudi is rather different.  Saudi has -- it also has no research reactor.  The closest that Saudi has to people with active experience of running a nuclear reactor are computer simulations on a simulated -- they have at King Abdullah s University there; very sketchy activity across different areas of the fuel cycle.  But, also, it has just got just three universities that have done a significant quantity of research and actually they do not compare very favorably to their Turkish counterparts.  It only has three national research institutions in contrast to Turkey s nine.  But much more than that, there is much less of this sense of coherence.  There is much more -- Saudi has much less of a sense of direction and strategy in its nuclear activities than Turkey does.  </P> <P>And just to emphasize this point that Saudi has a long way to climb before it has sufficient staff: in 2001, speaking in Arabic in an interview, the inspector general of the Atomic Energy Research Institute in Saudi said that working at the AERI there were just 15 Saudis with PhD s in relevant areas.  And that is a very low level to start from. </P> <P>Let me talk briefly about regulation because in addition to having the staff to run a nuclear power plant, you are also going to have to regulate every part of the process from putting out specifications for bids all the way through to safeguards and safety when your reactor is up and running.  One of the ironies about Turkey s long history of failed attempts to develop nuclear power is, actually, it leaves Turkey with a relatively sophisticated regulation infrastructure, at least in terms of what is in law.  The legal basis for regulation in Turkey is relatively strong.  It is very, very hard to assess whether -- what that translates into on the ground in terms of skilled personnel who are able to inspect facilities.  But at least Turkey starts from a very strong legal framework.  </P> <P>In addition, Turkey has three facilities under IEA safeguards at the moment; it has experience in implementation of safeguards, and if you look at the way it is cooperating with the IEA, it is clearly identifying areas of regulation weakness and launching very specifically targeted technical cooperation projects with the IEA to solve the problems that Turkey has identified.  </P> <P>In the case of Saudi, again, because it is -- most of what it s had until now is just the peaceful use of radioisotopes in medicine, in agriculture, its legal framework has been much weaker.  It has needed to have much less regulation and it has had much less regulation on the book.  Just two things I would point out.  Firstly, that there is evident -- and this is coming from, again, Saudi research itself -- that there is a strong lack of a safety culture within Saudi Arabia.  For instance, there was one study that found evidence that radioactive iodine was being discharged into the domestic sewerage system in Saudi Arabia.  And so that safety culture is going to have to improve very significantly before it launches a nuclear power program.  And it also does not have a safeguards agreement enforced with the IEA at the moment.  </P> <P>So let me say just one minute about what kind of policy conclusions this leads you to.  I do not claim for one second that, based on an analysis of capabilities, you can draw policy conclusions.  But I think it gives you a more complete picture than just assessing intent alone.  Firstly, I think it injects a note of realism into the debate.  This is going to be hard for countries that do not have the infrastructure in place; it is going to be very hard for Saudi but even Turkey has a significant way to go.  </P> <P>Secondly, it is also interesting from the point of view of identifying useful areas of leverage.  If you do believe that the U.S. ought to cooperate with these countries in developing nuclear technology -- and some of you do and some of you do not and I do not want to go into whether that is a good idea or a bad idea.  But for those people that do believe that, this identifies areas of leverage that the U.S. can give these states in return for shaping the direction of that program and making it more proliferation-friendly.  And that leverage varies on a case-by-case level.  </P> <P>In Saudi, for instance, it is clearly the training and the technology and the opportunities for their people to gain experience.  In Turkey, the limiting factor might well be cash or political will.  Well, political will is not something that the U.S. can help with but cash certainly is.  And that is more likely to be the limiting factor as opposed to technology.  So what I hope this research brings is, firstly, that degree of realism and, secondly, identifies points for possible leverage.  Thank you.</P> <P>Chris Griffin:  Thank you very much for an excellent set of comments.  I think we are actually reaching what was our scheduled finish time right now.  We are going to have a short period of question and answer.  We appear to have a lunchtime that will be pushed back a little bit from the scheduled noontime.  I m apologizing in the direction of Henry Sokolski because he is going to have to clean up whatever mess I leave with regard to the schedule but I would like to take a minute to follow-up on these excellent presentations with about 15 minutes for Q&A.  </P> <P>Three very quick ground rules:  We will have microphones going around the room; please wait for them to come.  As long as our speakers are on the record, we hope that you will join them.  Please also state your name and your affiliation and last, of course, please ask a question.  Up front?  </P> <P>Raghubir Goyal:  Thank you.  Raghubir Goyal from India Globe and Asia Today.  My quick question is that what other than nuclear program -- transfer technology we are facing together around the globe is because of AQ Khan, which you have brought it out in your presentation.  AQ Khan is still enjoying and also as its host also, they have not been penalized.  Why?  And why the [indiscernible] or IAEA or the UN or the international community has not gone after him or the host country?  And, finally, what is the future of, you think, U.S.-India Civil Nuclear Agreement, which is stalled now in the Indian parliament by the Lefts.  Why India is not interested in this deal, which the U.S. had -- or President Bush is saying the U.S. law for India?  </P> <P>Robert Einhorn:  On how come AQ Khan has not been punished more severely, a number of reasons.  One, he is a national hero in Pakistan so I think if the government penalized him too harshly that would be unpopular.  But one of the reasons I do not think the IAEA or the U.S. has been given direct access is that I think AQ Khan, based on his personal knowledge, could incriminate some high-level Pakistani civilians and military.  And I think they are very reluctant to enable him to do that.  </P> <P>There is another reason:  Pakistan continues to import technology illicitly for its own nuclear weapons needs.  And if AQ Khan were to be interrogated and turn over his entire rolodex to the investigators, I think that might constrain Pakistan s ability to go to the network or at least remain -- remnants of it in the future.  </P> <P>In terms of prospects for the U.S.-India deal have worked on this issue as well.  I think that if it fails, it is entirely because of Indian domestic politics.  From my perspective and the perspective of many in Washington, this was a sweetheart deal for India; it was a windfall gain for India s nuclear weapons program because it would enable them to purchase uranium for the civil program, freeing up all indigenous uranium for the weapons program.  So it is hard for us to understand why this got so hung up domestically in India.  </P> <P>I think at this point time is really running out.  I think, probably, the safeguards agreement with India has to be approved very, very shortly by the IEA board and the nuclear suppliers group has to pass an exception for India; there are some concerns about that that might take a while.  Then it has to come back to the U.S. Congress that has got to affirmatively vote in both houses.  And I think that is a tall order in the time remaining.  </P> <P>Bruno Tetrais:  Now just to add something to what Bob said about AQ Khan or the AQ Khan network, what worries me is what I do not know.  That is, I think we are going to have to live with the consequences of past Pakistani actions for the next decades and I m almost certain that there are ramifications of what has been done in the past which are not publicly known, which does not mean that I know them.  I do not know them.  Again, what worries me is what I do not know.</P> <P>That being said, I think that we should not have any worries about what -- I know of no reason to be concerned about current Pakistani actions.  I think those keeping the Pakistani nuclear infrastructure are extremely serious; that there have been behavioral, cultural, or structural changes to their nuclear management system.  So what we should worry about concerning Pakistan is the past and the distant future, not necessarily the present. </P> <P>Steve O Hearn: Yes, Steven O Hearn with Space and Missile Defense Report.  We had Mahmoud Ahmadinejad announcing that the 3000 centrifuges that Iran has are now being augmented by 6000 more centrifuges.  Given that Russia has provided to Iran sufficient fissile material for powering an electrical generating plant, is it possible that we should not take at face value Iran s assurance that this is only for electricity generation and that possibly they may be developing nuclear weapons?</P> <P>Chris Griffin:  A stunning notion.  Would anyone --?</P> <P>Robert Einhorn:  Obviously, we should not take it at face value not necessarily because of the facts you mentioned.  I think there are all kinds of reasons why we should not take it at face value.  They tried to deceive the IEA for 18 years; they were caught cheating.  I do not need to go through all the history of it.  By the way, was this a recent analysis?  </P> <P>Male Voice:  [Inaudible]</P> <P>Robert Einhorn:  Six thousand is incredible.  Maybe, as he said, the decent number of machines that have been newly manufactured -- presumably, they are not yet installed but maybe manufactured.  Is that what they said?  </P> <P>James Acton:  I ll just add one thing, which is I think it is today s national nuclear technology day in Tehran so it is a traditional time for the president to make a big announcement and its connection to what happens in reality on the ground will have to be borne out over the coming months.  It is a big deal, installing 6000 centrifuges, and just because the president says it is going to happen does not necessarily mean that it will.  </P> <P>Bruno Tetrais:  I was counting on James for this question but I have something to add.  I mean when they said -- when they announced last year that they were going for 3000, many people were saying they are not going to be able to go for 3000 in a short period of time.  They actually did manage to have 3000 in a relatively short period of time so I think we should take seriously this announcement that they are now going to double the capacity, although it was not clear to me because I -- I did not see the text itself.  I think they are going for 3000 IR-2s, in fact, which will be added to the P-1s.  </P> <P>I do not know how you can connect them.  Maybe Sharon knows more on that.  But we should take that statement seriously and, obviously, as I think it should be obvious, 6000 almost gives you a breakout option in some -- if you can operate them in a continuous fashion without major technical glitches.  But that is another issue.  But we should take it seriously.  </P> <P>Sharon Squassoni:  Right.  I would just add to what Bruno said.  I would urge people to focus less on numbers than -- because I think Iran has used to great effect this notion of, Well, when we have 3000 centrifuges running then it will be an industrial capability and there will be no turning back.   That is not exactly how it works for a centrifuge facility.  </P> <P>And so -- then I would add to that:  You really need to distinguish between intentions and capabilities and, specifically, statements by the Iranians, which, of course, over the last few years have consistently overestimated what they were able to do.  And the one bright spot, I think, in the December 2007 National Intelligence Estimate on Iran that I think was overlooked was that Iran actually is having trouble making those centrifuges work.  When it gets an industrial capability, it will turn the centrifuge facility on and those things will operate practically forever without breaking down.  It is not there yet. </P> <P>Cisipo Mayon [phonetic]:  Thank you.  My name is Cisipo Mayon and I m from the American University.  This is a question for James Acton.  Specific to your study of Saudi Arabia s capabilities, did you come across any handset [sounds like] past, ongoing potential contacts between Saudi, Pakistani -- Saudi Arabian-Pakistan in terms of transfer of knowledge or staffing or anything like that? </P> <P>James Acton:  Not very much in terms of the specific error of civilian nuclear technology.  I m trying to think whether we came across anything at all.  There is clearly a lot of links between Saudi and Pakistan in different fields and I m trying to think whether the literature survey turned up anything on the specific issue of civilian nuclear technology.  Off the top of my head - and I would have to go back through the research notes for this one - I think there were rumors of it but nothing substantial; nothing that we could put our fingers on in the open source literature that made the case in anything more than just vague rumors.  But if you want to chat afterwards then I can go through some of the -- we can talk contact details and be in contact on this question.  </P> <P>Robert Einhorn:  Throughout the Middle East and elsewhere, there is nearly the conventional wisdom that there is a quid pro quo in place; that the Saudis bankrolled Pakistan s nuclear weapons program and, in exchange, Pakistan would help Saudi in its moment of need and there is some circumstantial evidence to support that.  Prince Sultan, defense minister of Saudi once visited Kahuta, which is AQ Khan s laboratory.  And there are other circumstantial pieces of evidence suggesting that quid pro quo.  </P> <P>I have asked intelligence agencies in various parts of the world who have followed this very carefully and asked, Do you ever have really good evidence that there is a quid pro quo and what the nature of that quid pro quo may be?   And the answer is, No, we really do not have hard evidence.  This is supposition; it s conjecture.  It is logical but we really do not know.   And I think today whether or not there was some understanding between Pakistan and Saudi, I think today after the revelations of the AQ Khan network and the embarrassment that it caused for the Pakistani government, I think the Pakistanis would be less likely today than they were, say, ten years ago to make good on any quid pro quo arrangement.  </P> <P>Chris Griffin:  And with that -- and with apologies that we have had -- Bruno, would you want --?</P> <P>Bruno Tertrais:  Can I just add something to that?</P> <P>Chris Griffin:  Please, sir.</P> <P>Bruno Tertrais:  You have a former senior Pakistani government official saying almost on the record that having Pakistani nuclear weapons on Saudi soil would create a situation, which is, I quote, worse than the Cuban missile crisis.   It does give you an idea of the recognition that exists in some Pakistani circles, at least, that this would not exactly be a benign -- that would -- how significant, this is not any evidence for or against.  It gives you a sense of the recognition of the importance of the problem that it might create.  </P> <P>Chris Griffin:  When Dany asked me to come pick up the second half of this panel, she promised it would cheer my day up and I m afraid that she may have lied.  This has not been cheerful but it has been extremely informative.  And going into the next set of the discussion, talking about the U.S. and the India nuclear deal, and further impacts on the nonproliferation system, we will continue this discussion.  We will take a very short -- we will call it a five-minute break, actually; see what happens before Henry Sokolski takes over the next panel.  Thank you very much with your patience.  We have been a bit delayed and thanks to our speakers for their excellent remarks.  Thank you.  </P> <P> </P> <P>Panel II: The Indian Nuclear Deal: What Should Be Done in 2008?</P> <P> </P> <P> Henry Sokolski:  We are going to begin.  So if you could sit down, we would appreciate it.  There will be a large lunch for those of you who are currently eating, so you are going to gain more weight than you want if you keep eating.  Sit.  Thank you.</P> <P> Well, no nonproliferation gathering would be complete without talking about India.  So we are no exception.  We are going to talk about India and how we deal with India, as you have already heard in the first panel, is something of a bellwether for the sturdiness or weakness of the nuclear rules as they are currently implemented and promoted.  Now roughly, the nuclear rules are viewed - I think incorrectly but that is okay - but they are popularly viewed as a bargain.  And the bargain roughly runs them that s got will not give nuclear weapons to them that s not, and them that s not won t try to get.   </P> <P>However, in addition to some pledges about earnest efforts towards giving up or controlling nuclear weapons, the weapon states are somehow obliged to help promote - and we will come back to this at the last panel - the benefits of peaceful nuclear energy.  And to listen to any diplomat, American or Iranian, the view is that includes everything that you need to come within a whisker of getting a bomb.  Now in the Indian case, we have something that stirs the pot.  We have a deal with a country that never signed up to the nuclear rules.  They got a bomb that actually, to be blunt, violated some of its understandings with Canada and the United States in the early seventies, and we want to be friendly with.  </P> <P>Today, what we are going to do is talk about the fate of the nuclear deal, which right now is mildly stuck for reasons which, to the relief of most people in Congress, are not their fault directly; it is Indian politics, they claimed.  But actually, in all fairness to those who were critics of this deal, mostly it is because they pass various conditions on the implementation of the deal which are obnoxious to different aspects and constituencies of Indian polity.</P> <P>And so what I thought we would do today is to get current, is to get a round-up of views about -- well, given that this deal for the moment seems stuck, how will things play out this year?  And I will allow the panelists to go a little bit further.  How should it go even beyond this year because I always say any big idea, good or bad, always has legs; it kind of comes back.  And so whatever your views are, this thing is probably not going to disappear is my hunch.</P> <P>The order of battle, I thought would be Daryl, whose views are well known, but we always like hearing the latest iteration.</P> <P>Daryl Kimball:  That is very kind.</P> <P>Henry Sokolski:  Well, it is true.  And David Trachtenberg will go second and he will perhaps give a different view, I hope, of how things should sort out.  And then we have someone who is new to the scene; maybe you have not heard before from Young India, which is an organization, the character of which you can find on the web, but basically is promoting views about democracy and development and is backed pretty much by an Indian counterpart in India.  Am I correct?</P> <P>Rohit Tripathi:  Yes, it is emerging.</P> <P>Henry Sokolski:  It is emerging.  Well, there you go.  You were here first.  On that note, why do we not go from right to left?</P> <P>Daryl Kimball:  Well, thank you very much, Henry.  And thank you to AEI for the invitation.  This is a very interesting event.  As we approach the 40th anniversary of the signing of the NPT, I m one of those who believe the treaty is in a great deal of trouble; not acute trouble but chronic trouble.  And one of the reasons is that leading states like the United States and others have failed to consistently enforce their own nonproliferation disarmament standards and laws.  And the case of the India and Pakistan is a good example.  And the latest example is the U.S.-India nuclear deal, specifically the July of 2005 proposal to carve out a country-specific exemption from the NPT, from the Nuclear Suppliers Group rules and from the United States own Nuclear Nonproliferation Act of 1978.</P> <P>Now, in my view it is Orwellian to claim that the nuclear deal would bring India into the nuclear nonproliferation mainstream and the behavior expected of other responsible states.  India s commitments under the July 2005 agreement - I will not go through those - simply do not justify making a far-reaching exception to international nonproliferation rules and norms.  The other thing, I think, that is lost upon many here in Washington is that unless the Bush administration adjusts its current policy vis-à-vis the Nuclear Suppliers Group in particular, decisions could be taken soon at the Nuclear Suppliers Group and even at the IAEA Board of Governors that could undermine the minimal but still vital conditions and restrictions that, as Henry mentioned, were put into the Henry Hyde Act of 2006, the U.S. implementing legislation that carved out this exemption from U.S. law to allow for possible nuclear trade with India, a state that has not signed the NPT and that does not allow full-scale safeguards.</P> <P>Now just to remind us, it has been a couple years now.  The Hyde Act requires, among other things, the immediate termination of all trade with India if New Delhi resumes nuclear testing or violates its safeguards commitments.  </P> <P>It also requires an India IAEA safeguards agreement that applies in perpetuity to all nuclear materials, equipment and technology at all civilian nuclear facilities declared as civilian by India.  It also creates a clear prohibition on the transfer of enrichment reprocessing and heavy water production technology for Indian national facilities; there are some exceptions for multi-lateral facilities.  But if the Bush administration fails to support an NSG policy with these restrictions and conditions, NSG guidelines would be less restrictive, less stringent than U.S. law or policy creating a playing field that is less than level.  Other less constrained suppliers might gain commercial advantage and undermine U.S. nonproliferation objectives and policies.</P> <P>Now, as Henry said, thankfully, the deal may be doomed by internal strife within the coalition of Prime Minister Manmohan Singh.  Even if India s Congress Party leaders can somehow overcome the stiff opposition from leftist parties - they are due to meet sometime this month to discuss the opposition of the leftist parties to the deal - the deal is still going to face, I think, principled and stiff opposition from key states in the Nuclear Suppliers Group, for 45 nations in the Nuclear Suppliers Group.  Consequently, I would argue and I believe that if the deal ever makes its way to the NSG, it is unlikely that India will obtain the clean exemption that it seeks, that is, an exemption from NSG rules without any restrictions or conditions whatsoever.</P> <P>Now, clearly, there are some states that are going to be - not many states that are willing to bend the rules to help India buy new reactors and the additional fuel needed to run them; there is growing support for restrictions and conditions that are based on the Hyde Act and an interest in encouraging India to join the five original nuclear weapons states in halting fissile material production and signing the Comprehensive Nuclear-Test-Ban Treaty.</P> <P>Let me just go through what I think the opposition and the objections are going to be at the NSG and what might be done by those states.  The first, with respect to the new safeguards agreements with the IAEA, which, of course, is almost purely symbolic and hardly worth the $10 million annual cost of these inspections.  The IAEA board of governors could and should reject any Indian statement or interpretation that makes the safeguards over these civilian facilities contingent on the continuation of foreign fuel supplies, which clearly runs counter to the principle of permanent safeguards.  And this kind of statement would clearly be intended to extricate India from any safeguards agreement in the event that fuel supplies are cut-off.  Why would fuel supplies be cut-off if India conducts a nuclear test or violates safeguards?</P> <P> Second, India pledged in July 2005 to conclude an additional protocol to its safeguards agreement and some NSG states are likely to insist that India and IAEA conclude or, at least, show the board of governors the outlines of what that additional protocol might look like.  Some NSG states might demand a meaningful additional protocol, which, if you think it through, is really difficult to obtain in a state, which has a secret nuclear weapons program going on.  So far, neither India nor the United States has been able to explain - and I would be interested in learning more about this - how the additional protocol would apply to Indian nuclear facilities or when.</P> <P> Third, the current U.S. proposal to exempt India from NSG guidelines -- and there is a pre-decisional draft that was circulated in March 2006; there will be a new one that would come before any NSG decision is taken.  But the current proposal would, in the case of a resumption of nuclear testing by India, make the suspension of nuclear trade optional for NSG members; not mandatory but optional.  In the view of a substantial number of NSG states, such an approach is an entirely unacceptable situation.  It would undercut the international norm against nuclear testing and make a mockery of NSG guidelines.</P> <P> So no matter how it interprets the ambiguous wording of the U.S.-India Nuclear Cooperation Agreement, it is highly unlikely that NSG members would agree to allow civil nuclear trade with India without clarifying that India s exemption to NSG rules would be revoked in the event of renewed testing by New Delhi.</P> <P> Fourth, India is seeking -- and the United States has proposed an NSG guideline that would open a way for other nuclear suppliers to transfer sensitive plutonium or processing uranium enrichment or heavy-water production technology to India.  India very much wants this in order to pursue the fabled three-stage nuclear fuel cycle that Homi Bhabha outlined decades ago.  It is unnecessary for India s energy needs but they are pursuing it, nonetheless.  This is deeply troubling to NSG states because they recognize that no IAEA safeguards could prevent such technology from being replicated and used in India s nuclear weapons program.  </P> <P>At the moment, 44 NSG member states or so, except for the United States, support a proposal for a new criteria-based NSG guideline that would bar transfers of these sensitive nuclear technologies to non-NPT members, states that have not concluded additional protocol with IAEA or states that are not in full compliance with their safeguards agreements, like Iran.  So my view -- it is highly unlikely the NSG is going to grant what India wants, which is an NSG exemption that would allow such transfers.  Almost wrapping up, Henry.  We are almost on time here.  Thank you.  All right.</P> <P> Fifth, NSG states are troubled by India s attempts to secure nuclear fuel supply guarantees for the lifetime of their reactors, which would, of course, help them overcome the possibility that foreign suppliers might cut off nuclear trade if India decides to resume nuclear testing or violates safeguards agreements.  Some NSG states will likely seek to block such arrangements.  There are various ways they might try to do that; it will be very difficult but I think they will try to do that.  And as the Hyde Act suggests, ensure that nuclear fuel supplies are commensurate with reasonable reactor requirements and not provide multi-year strategic fuel reserves for India.   And I would note that that language, which is advisory in the Hyde Act on reasonable reactor requirement fuel supplies, came from none other than Senator Barack Obama in the Senate Debate on the legislation in 2006.</P> <P> So finally, there are, thankfully, a few NSG member states that take their NPT commitment seriously.  In keeping with the Article Six commitment on all NPT states to support measures to help end the arms race and pursue disarmament, some states will likely seek language in the NSG that encourages India to reconsider the CTBT, which they have not signed, of course.  In addition, a number of NSG member states recognize that the supply of nuclear fuel to India from outside could free up its existing and limited indigenous stockpile and allow it to increase the rate of production of fissile material for weapons.</P> <P>And as a result, as Henry and I have noted throughout this debate, this would effectively violate the United States commitment under Article One of the NPT not to assist in any way others states nuclear weapons programs.  Now, Pakistan sees this scenario emerging and Pakistan is already preparing to increase the rate of its own fissile material production.  So no matter how you interpret the fissile supply situation in India, this has already exacerbated the slow-moving but ongoing fissile race in South Asia.</P> <P> So in conclusion, I mean this is the time in my view for Congress to take a close look, even though the 123 Agreement that they still have to approve is not before them, to take a close look at all of these ambiguities and to make sure that the Nuclear Suppliers Group guidelines are consistent with the Hyde Act.  And it is important for Congress, as well as NSG member states, to press the Bush administration to live up to the very basic but still very important restrictions and conditions that were put into the Hyde Act.</P> <P> And for those of you who are interested, I have copies of a letter that several of us, including a few individuals associated with AEI and the Arms Control Association and others, wrote to Congress about some legislation that would seek to get the United States government to pursue an NSG guideline that is consistent with the Hyde Act.  So if India s leaders cannot abide by these minimal standards and they decide to reject the deal, so be it; that is their choice.  But I think what is clear, we have to acknowledge, is that additional concessions to India would only further compromise the already beleaguered and tattered nonproliferation system.  Henry.</P> <P> Henry Sokolski:  Well, you know you are at a radical organization when the kick-off suggestion is to implement and follow laws.  </P> <P>Male Voice:  You can start at the beginning.</P> <P>Henry Sokolski:  I do not know if this is time to start doing that sort of thing, but, okay.  The next speaker is David Trachtenberg, who actually is someone I first met 27 years ago; it is pretty just saying that.  If you take a look at his resume it is quite impressive.  I noted something, which I did not know, that it is legal to be a deputy assistant secretary in two places at the same time.  This is a man who is very agile, at the very least, but, more important, experienced to such an extent I think it is fair to say what he has forgotten is more than many of us know.  So on that note --</P> <P> David Trachtenberg:  Well, if it is not legal then I am in trouble, Henry.</P> <P> Henry Sokolski:  That is too late; you have done it already.</P> <P> David Trachtenberg:  Thank you for that and thanks to AEI and MPEC for the invitation to be here.  I am pleased to be here.  You know when I was invited to participate in this panel I was not specifically asked to speak as a proponent of the Nuclear Cooperation Agreement with India.  But I had a feeling that perhaps the administration s position and rationale for that might be somewhat underrepresented here and so I took it upon myself to make that assumption and I think it would be worthwhile just perhaps to say a few words in recognition of administration policy.</P> <P>I am certainly not an administration spokesperson, although in prior years I did play one on TV.  And I have stayed at a Holiday Inn Express but that is beside the point.  Since I guessed right, I feel I do not need to ask the permission of the chair to revise and extend my remarks subsequently.</P> <P> Henry Sokolski:  You have ten minutes.</P> <P> David Trachtenberg:  Thank you.  In that period of time then, let me make a three basic points.  The first point is specifically related to the Nuclear Cooperation Agreement with India, but the second two are broader points and related to nonproliferation, more generally.</P> <P>Now point number one:  I think for all its shortcomings, or perceived shortcomings, I do believe that the Nuclear Cooperation Agreement with India could prove to be a very useful tool in drawing India closer to acceptance of global nonproliferation norms and U.S. nonproliferation objectives.  I think the agreement could, in fact, strengthen our relationship with India, which I would argue is a worthwhile strategy and part of the rationale for those who support this particular agreement.  </P> <P>India has been called many things.  One of the things that it has been called is the world s largest democracy and, as such, it shares many American values.  India shares the U.S. interest in combating terrorism.  I saw some reports indicating that India has suffered as many as 60,000 or more civilian casualties as a result of terrorist attacks.  India can be seen as a strategic counter-balance to an emerging China, especially if China pursues a course, as they appear to be doing, of increasing their economic and military capacity.</P> <P> India, I would argue also, understands the dangers of nuclear proliferation.  In fact, so many in India see India itself as the main victim of proliferation primarily because of the proliferation activities that have gone on between China and Pakistan and China s relationship with Pakistan.  India is an emerging economic power with a need for additional supplies and sources of energy.  And I think India s desire to look at nuclear energy is not illegitimate in that context.  </P> <P>In short, India is an important regional power in a potentially volatile region of the world.  It is difficult; it is a tough neighborhood to be in when you have China and Tibet to the east and the north, Pakistan, Afghanistan and Iran further to the west.  It is a tough neighborhood.  So strengthening our relationship with India, I believe, makes sense.  And the Indian government has made civil nuclear cooperation a key issue in strengthening that relationship.</P> <P>Now some have challenged the administration s argument that this agreement would bring India into the nonproliferation mainstream.  Daryl mentioned that, argued that as well; he referred to that as Orwellian.  I tend to disagree; I do not think it is Orwellian at all.  And I do think that implementation of this agreement does require India to take some fairly significant nonproliferation measures that tie it tighter and would tie it tighter to existing nonproliferation norms - measures as such as clearly separating its military and civilian nuclear facilities; placing its civilian nuclear facilities under international inspection by the International Atomic Agency; developing a safeguards program for its civilian nuclear program that must be proved by the IAEA; agreeing to work to prevent the spread of nuclear enrichment and processing technologies; adopting stronger export controls and adhering to guidelines within the Nuclear Suppliers Group and the Missile Technology Control Regime, the MTCR.  </P> <P>In fact, India agreed basically to move in this direction in 2005 and, as has been noted, is required to do so by a number of the provisions in the U.S.-India Peaceful Atomic Energy Cooperation Act, what has been referred to as the Henry Hyde Act that was signed by President Bush in December of 2006.  So I think on balance there are some concrete, positive steps that India can and must take in order to reap the benefits of this agreement.  </P> <P>The notion that this is a bad deal for the United States, I think, in part, is belied simply by looking at the Indian domestic political situation as has been mentioned, and the fact that many in India, especially on the Indian left, see this as a surrender of sovereignty and a ruse to align India more closely with the U.S. policy.  No, the agreement that we are talking about here is not perfect, but in my view we should not let the perfect to be the enemy of the good.  The old nonproliferation approaches with respect to India frankly have not worked and I do applaud the administration for thinking creatively and seeking to develop solutions that are out-of-the-box solutions, novel and creative.</P> <P>Which brings me to my second point, which is a broader point.  From my perspective, to be effective, U.S. nonproliferation policies need to be tailored to individual circumstances and countries.  I do not believe there is any one-size-fits-all or cookie-cutter approach to nonproliferation that will be equally effective in all cases.  Now there is a corollary to that and that is that U.S. nonproliferation policy should be subservient to our over-arching national security strategy and strategic goals and not vice versa.  </P> <P>Too often, I sense nonproliferation advocates tend to, or appear to, stand its principle on its head as though our strategic objectives must be tailored to meet the imperatives of existing nonproliferation norms and regimes.  In my view, frankly, that puts the cart before the horse.  We have seen this kind of -- flipped this kind of inversion in the past, at work in the arms control area where, despite the end of the Cold War, Cold War-style agreements and agreements developed during the Cold War have tended to be seen by some as sacrosanct even when they no longer served or were, in fact, counter-productive to U.S. interest.  </P> <P>I think we are finding similar issues in the nonproliferation world where, in fact, old constraints may actually limit our ability to meet new security challenges.  The MTCR, I think, provides several examples of this, where the law of unintended consequences may actually restrict our ability to do things we might otherwise want to do, such as cooperate with other countries, including India, on missile defense, for example, or in the area of counter-terrorism.</P> <P> And that leads me to my third and final point that I would like to leave you all with and that is, again, from my perspective, I believe all nonproliferation agreements should be continually reassessed for their effectiveness and relevance as strategic circumstances change.  The next administration, whether Republican or Democrat, should make this reassessment part of any national security review it conducts.  We reassess our national security strategy on a fairly regular basis; we adapt it to changing strategic circumstances.  The White House issues various national security strategies; the next administration, I presume, will do the same.  The Department of Defense issues a quadrennial defense review every four years, explaining how we will re-posture and rebalance our armed forces to be responsive to our changing strategies.  </P> <P>What we do not have is a deliberate and comprehensive process to reassess the web of nonproliferation agreements and regimes, many originally constructed during the Cold War, and how they might be tailored to be responsive to contemporary security challenges.  We need to do that and, in my view, the next administration should make this one of its nonproliferation priorities.  And Henry, you pack a mean stopwatch and I hope I have stayed within the limit there.  So thank you very much.</P> <P>Henry Sokolski:  Oh, by the way, you know we are on an important issue when it is recommended by someone in the government that there be a review of all of our policies.</P> <P>David Trachtenberg:  Formerly in the government.</P> <P> Henry Sokolski:  Formerly in the government.  Well, nonproliferation, I always thought, was something dismissed as crappy arms control.  Apparently, we have run out of things to focus on so it is becoming important.  Now, I am being a little sarcastic because I have been in the field for 30 years.  In any case, it is interesting how these marginal issues are starting to become center stage when people are thinking that they have to be involved and reviewed and looked at, which is, I think, a healthy thing.</P> <P>The last speaker, actually, I think, will go to what I think is a very important point that was raised by David here and that is how do we go about strengthening our ties with India.  I have not heard in any of the debates the suggestion that we really should stay away from Indians; that Indians are bad people and that we do not like them and we really should not do anything with them because we do not like them.  It is actually the case that everyone wants somehow to strengthen our ties with the Indians because we see them in our midst; there are a large number of American citizens and residents here.  We do an increasing amount of business with them and it is a kind -- and we like their food; the food is good, and a lot of good restaurants.  So it seems to me that it is appropriate that we have someone speak to this.  </P> <P>And the final speaker, Mr. Tripathi -- we have someone who is quite unusual in that he has lived here in the States, is an Indian citizen, has written on what our relationship should be, has ties to India and is a small businessman who works actually in an electronic firm which everyone says at every Senate and House hearing is somehow important.  So on that note --</P> <P>Rohit Tripathi:  I want to start by thanking Henry.  I received his phone call out of the blue at my home phone number about a month ago and I had no idea why he called.  And it turns out that somebody in the Bush administration felt that I should be here talking about the nuclear deal.</P> <P> Henry Sokolski:  I am not from the Bush administration.  I think I could say that without any qualification.</P> <P> Rohit Tripathi:  Well, I want to thank you for inviting me and giving me the opportunity to speak today.  I am also privileged to be with such esteemed company and, of course, in front of such an informed audience.  Henry has given a very good segue here because we - Young India, my group - wanted to understand -- we struggle to understand the rationale for the deal.  So we zoomed out a little bit and we wanted to see what is it that drove this deal to be of such importance.  </P> <P>So we went back and we laid down our own views on Indo-U.S. relations and we fundamentally believed that Indo-U.S. relations are indisputably critical for democracy across the globe.  It is a relationship of immense potential; we both share values of democracy, justice and liberty.  And something that is not often talked about is this triangulation that has inspired me, personally, between Hendy David Thoreau, Gandhi, and Martin Luther King and how civil disobedience led to nonviolence in South Africa and then India under Gandhi and then how Gandhi s work led to inspire Martin Luther King.  </P> <P>So I personally believe that there already exists a very fundamental basis for the relationship and we do not really need any deals per se to concretize that.  That said, the topic of today s conference is nonproliferation; specific to this panel is the nuclear deal.  So we wanted to view the nuclear deal from three different stand points - the geopolitical, the economic, and the energy.  While we are trying to understand the issue, we were getting arguments, pro and con, on these three metrics, generally.  So we felt that it was worth looking at the deal from these three different view points and then, you know, forming a more informed opinion.</P> <P>From a geopolitical metric, the arguments we got were that new geopolitical lines that effectively give the U.S. a proxy presence in South Asia is going to be good and the deal is going to do that by bringing India and the United States together, namely, as David said, to counterbalance a growing influence of China.  Also we believe the Indian administration and bureaucracy wanted a close relationship to signal India s arrival onto the world stage.  And they felt that the nuclear deal would be such a starting point that -- and everybody did take notice of it.  So in a sense, yes, India did arrive but the trajectory it took and was taking could be detrimental to that arrival and there are other things that we could do.  And that is something that I will talk about as we go on in the presentation.</P> <P> This was the geopolitical idea that we felt that inspired the deal to begin with.  Also, we heard a lot of arguments from the business community that once the deal gets through, this is going to be such a vote of confidence for India and the United States to come together that there is going to be so much trade that is going to go on.  And it was touted as giving business a green signal that a new trade paradigm has arrived.  The U.S. Chamber of Commerce enthusiastically endorsed the deal saying that about the $100 billion worth of Indian investment in the U.S. nuclear industry would be made possible.  And, also, there were various statements from Indian and American businesses hailing this deal as a big symbol of the new economic relationship.</P> <P>And then, finally, and mostly as an afterthought, the energy metric would be discussed.  You know what?  It is great that we are having this deal because in the end India needs more energy and U.S. nuclear technology can help there.  And, also, perhaps nuclear energy is the fastest way of meeting India s energy needs.  So we heard all this for about a year.  We did a briefing on the Hill with top experts to understand what the real rationale is because after hearing all this we never were able to find something substantive that we could get our arms around.</P> <P>So in 2008 as we look forward -- and more generally we look forward to better Indo-U.S. relations, I believe the thoughtful answer to the question posed to this panel requires revisiting these metrics that underlie the deal itself.  Are these metrics relevant?  Is the nuclear deal the best tool to achieve these metrics?  Are there any alternative mechanisms to improve Indo-U.S. relations?</P> <P>Let us go back and let us revisit the geopolitical metric.  It is a valid metric.  However, we believe that the relationship between the India and United States should be based on sustainable principles, not these ever-shifting geopolitical goalposts that we are trying to encapsulate in calculated deals.  And that is why we felt that we had to methodically explore alternatives to this deal because we felt that, sure, it seems that there is a genuine desire amongst the technocracy, the bureaucracy and the elected official on both sides to force something but they may not have picked the right platform to do so.  </P> <P>So we went back and we wanted to spend some time and explore alternatives rather than being a mere critic of the deal.  We felt that energy could well be a platform for such collaboration.  And the energy collaboration itself could bring about a new geopolitical paradigm that the nuclear deal was seeking.  And, thus, it is important to mention here that Young India went back and we worked with Congressman Jimmy McDermott and we have finally drafted a bill that is now on the House Floor - HR5705 - to set up a Congressional and Presidential Commission on exploring the nuclear energy collaboration.  </P> <P>And this bill provides an alternative platform for energy cooperation to renewables which, number one, gives a fight against global climate change tremendous impetus with two prominent nations making more than a symbolic gesture to battle it.  It also exemplifies the process - and this is one of the key criticisms of the nuclear deal - more than the content of the deal, the way it has gone about.  The process that we are now proposing says that we should evolve policy in a sustainable way such that we have a thoughtful examination of options; we have a clear set of recommendations.  And because of the way we approached the topic - we make it inclusive; we have a debate with the experts and citizens alike - there is a collective will at the end to implement these recommendations.  So we feel that the bill that we have proposed achieves that.</P> <P>Let me quickly talk about the economic metric that I had referred to earlier.  It is a relevant metric but it does not need the nuclear deal to be achieved.  Making the deal appear requisite is, in my own opinion, putting a false obstacle on the way of ongoing interaction.  It is heartening to see major businesses from both nations establishing each other in respective markets through the U.S.-India trade policy forum.  The list of joint working groups, targeted trade pacts, is long.  And now, the Indo-U.S. economic dialog has also created this private sector advisory group that is specifically targeted to help the USTR and the Minister of Commerce in India to form a basis for bilateral trade.  </P> <P>There is no logical reason, in my opinion -- that the deal is not going through should stop these promising negotiations.  That would definitely be a shame.  The deal s fate cannot and should not hold the two nations captive.  Again, I want to bring back your attention to the bill that we ve proposed and we believe that our bill is going to spur commerce and in an untapped area of potential collaboration like the renewable power on an unprecedented scale.  The potential for American investment that has been held up because of this deal being in the pipeline can be achieved if this new bill is passed, albeit, it will be for a different industry.  Not the nuclear industry but for the renewable industry.</P> <P>And, lastly, the energy metric.  So based on India s planning commission data and other credible sources, the renewable energy trajectory is looking more promising than the nuclear energy trajectory.  The debate is not between nuclear or renewable but looking at the relative rate of returns and then investing in each, accordingly.  Plus, generation is not the only part of the power challenge in India.  While the nuclear deal has claimed an increase in energy output, it will amount to much less than promised if the current lousy grid in India is not addressed, the transmission and distribution problems are not addressed.  Our proposal alternative recommends collaboration in transmission and distribution technologies as well.  </P> <P>Plus renewable power is inherently decentralized, thus reducing losses that one would incur compared to centralized nuclear power generation.  Energy security is key and something we just never could understand that the nuclear deal makes India energy dependent to the degree it uses nuclear energy because it has no fuel.  So, we still are at a loss here.  Why do we want to have this deal from India s standpoint?  </P> <P>Some concluding thoughts.  Creating policies that are put in place without a meaningful debate are a risky venture.  We have raised questions about security, cost, and waste that the Indian government must respond to before moving in the nuclear direction.  The question of viability is often overlooked.  If Bhopal has left scars still visible 25 years later, then I do not need to extrapolate the fallout of a nuclear disaster and the anti-Americanism that would create.  It is in the interest of both governments to see these questions answered adequately.  </P> <P>I just want to say this one more thing and this is more from the IMO development and that is my grandfather was a devout follower of Gandhi, and he lived as a farmer in rural India all his life.  I have a deep connection with the Indian village.  To me, it would be incredible if a child in a small village in India flips a switch to finish her homework and says, You know what?  That light is from America.   We believe that there are alternatives to achieve that dream, but we do not think that we need to rupture the NPT, we need to create a wedge in the NSG, we need to have circuitous discussions with IAEA to achieve that.  Therefore, I believe the nuclear deal needs to find a good resting place and as gracefully as we can provide it.  Thank you.</P> <P> Henry Sokolski:  Well, I think we have done something which is miraculous at AEI, and that is we are ahead of schedule.  We have even made up the time we lost on the first panel, which allows us to do two things:  Continue to talk and take questions.  Just for the sake of making sure everyone s thoughts are as clear to this group as possible, each of the speakers should take no more than a minute to comment, if they want to, on anything they heard the other panelists say that they find interesting to comment on, again, following the order.</P> <P> Daryl Kimball:  All right.  Thank you, Henry.  Let me just expand a little bit on my comment about the Orwellian nature of the suggestion that the deal brings India into the nonproliferation mainstream.  I mean the oldest trick in the negotiating book by a negotiator is to offer something that you have already done and present it as a concession, or to present something you are about to do and present it is a gift to the other side.  That is what India did in July 2005.  I do not know if its negotiators were that good or if the U.S. negotiators were just that stupid.  </P> <P>But what David outlined in terms of the commitments that India has made with respect to export controls, with respect to separating civil and military nuclear facilities, these were all things that India had already done or was about to do.  India did not make any new concessions of any significance.  The separation of the civil and military sectors is on paper only, so we have not achieved anything of significance from a nonproliferation standpoint that India was not already prepared to do.  </P> <P>The second thing I will just mention is there is this age-old debate about to what extent should nonproliferation imperatives rule U.S. nonproliferation policy?  It is easy for those who criticize the nonproliferation ayatollahs, as we are sometimes called, for being too devout, to -- well.  There has to be a balance, obviously, and there has to be some tailoring for individual states.  Not every proliferation case is the same.  History is different.  </P> <P>But at some point, I think we have to look at this approach that David was just outlining and see what the results are, and the results are disastrous.  I mean, Pakistan is a great example.  India is another example of when we ignore our own rules and we allow other countries to run roughshod over them, we have disastrous, long-term consequences.  So at some point, I think we need to recognize that there is value in preserving basic principles and using those to guide our [audio glitch] in the future on security and nonproliferation issues.</P> <P> Henry Sokolski:  All right.  That was what is known as the Delaware minute.  If you live out on the shore and need to get service for dinner, you know what a Delaware minute is.  Let s try to make it a Washington minute from here on out.  Sorry. </P> <P> David Trachtenberg:  Well, I will give it a try, Henry.  I m glad Daryl and I do agree on one thing, and that is there does have to be a balance and there does need to be some tailoring in our approaches.  That is probably where our agreements end.  We certainly should not be evaluating new types of nonproliferation approaches by how well or how poorly they comport with existing nonproliferation norms.  In my mind, the question is, and has always been, do they or do they not best serve our national security interests.  If these kinds of agreements do serve our national security interests but do not fit nicely and neatly into existing nonproliferation structures, then maybe those structures themselves need to be evaluated.  </P> <P>And tailored approaches such as -- I would describe this particular approach with India --- I think are essential in a security environment that is as dynamic as the current security environment.  I mean it is interesting there has been a lot of discussion about the NPT, the Nonproliferation Treaty.  Just as an example, an agreement that defines a non-nuclear weapon state only as one that exploded a nuclear device before 1968, I think it is -- </P> <P> Daryl Kimball:  Seven.</P> <P> David Trachtenberg:  -- 67 -- perhaps needs to be looked at more carefully for its continuing and enduring relevance in today s environment.  </P> <P> Rohit Tripathi:  I would just like to comment on the review of the nonproliferation laws that we do have.  I m a systems engineer, and optimization is one thing that I work on on a daily basis.  Our view is slightly different.  We think that, sure, you could take a look at specific cases but, overall, if India is interested in getting nuclear energy, then what we really should do is really take a look at the big picture, the entire NPT regime, then build something that can truly bring everybody under the umbrella, including India.  </P> <P>I think exceptions are dangerous because they set precedents.  Today, India is ruled by a democratic government; anything can happen tomorrow anywhere in the world.  I mean too much is going on and too fast, so we need to have a larger umbrella of nonproliferation that is acceptable to everybody.  And maybe this is an opportunity to visit that issue.</P> <P> Henry Sokolski:  All right.  We are now going to open it up the floor.  We have about 20 minutes.  I think an all-time first I saw someone raise their hand in the first five minutes of the presentation.  Without scolding this person for doing this, I m going to actually recognize him, despite my tendency not to, because he is so well-known and so well-loved.</P> <P> Stanley Kober:  Thank you, Henry.  I appreciate that.  Stanley Kober with the Cato Institute.  Primarily for Mr. Trachtenberg, on this idea of using India as a counterbalance to China, a few months ago Prime Minister Singh was in Moscow.  And Putin stressed at his press conference the importance of a trilateral relationship:  Russia, China, India.  As soon as the prime minister returned to New Delhi, it was announced he would be going to China.  In January, he did.  Shortly afterward, they said, No, we are going to have military exercises, China, India in India -- army exercises.   So I m wondering if this is not a bit too clever by half, that what we are saying is the Indians really do not want to make a choice, and I think it may be counterproductive to push them to the wall on this.</P> <P> Henry Sokolski:  By the way, all of the rest of you that have questions, think about a question as much as you can.  Narrow it down.  </P> <P> David Trachtenberg:  I think that is a fair question, a perfectly legitimate question to ask.  I think India has for many years, for decades, prided itself on its independent foreign policy as part of the so-called Non-Aligned Movement.  Oftentimes in the past, that has placed India and India s foreign policy decisions at odds and in contrast to U.S. security objectives and goals.  India is still to a degree, I believe, walking a little bit of a tightrope in terms of its own foreign policy, how it is perceived vis-à-vis its own domestic requirements and constituencies.  </P> <P>Nevertheless, I do think there is some value in trying to nudge India - perhaps, that is a better word move India closer toward the United States, toward U.S. thinking, not only in the area of nonproliferation but in other foreign policy types of issues, more generally.  I do not necessarily believe there is any real love lost, in particular, between India and China, certainly, not among those Indians who blame China for a lot of the proliferation woes that India must confront.  So there is value there.  </P> <P>And the real debate is whether or not this particular agreement or agreements like it help strengthen that relationship in a way that can have longer-lasting effects that might draw India closer to the United States into the proliferation security initiative, more in concert with U.S. security and nonproliferation objectives.  I think there is potential value there.  </P> <P> Henry Sokolski:  All right.  I m going to ask the panelists as well to be as concise as they can be to these questions because there are a fair number.  We have Catherine.</P> <P> Catherine Kelleher:  Catherine Kelleher, University of Maryland.  I would like to ask David Trachtenberg a question just because I think there is an inherent confusion, at least in my reaction, to his stressing of the difference between a norm and the interests of the United States.  Is it not the case that we support this norm in other areas of nonproliferation policy, just not for India?  And the question is can you, in fact, have selective endorsement of a norm.  Or is it not the case that if you really have this as a norm, you are bound to work within it to explore all possibilities before you depart from it?</P> <P> David Trachtenberg:  I think if you accept the norm, you accept the requirements that flow from the norm.  What I was attempting to advocate was that we take a look at those norms that we have signed up to and try to resolve the issue of whether or not they are appropriate and relevant and should continue to endure in their present form as we move into a new security environment.  So the norms themselves may change.  I just do not think that we as a nation have done that kind of analysis yet to be able to answer that question that the norms are good and the norms need to be unchanged.</P> <P> Henry Sokolski:  Let me exercise the prerogative of the chair for the whole panel.  We actually are in a point in time where a law has been passed.  This is a little bit beyond norm; it is actually the supreme law of the land; the president signed it.  What would you suggest we do, each of you, in dealing with the Hyde Act because it actually reinforces - I hate to say it - that norm?  Is it a mistake?  Should we pass another law to open this matter up to more flexible treatment and perhaps maybe even recast the deal?  How do we work our way out of this?  In other words, what do we do with this law, each of you?  And try to keep it to 30 seconds, if you would.  Well, because we have other questions.  </P> <P> Daryl Kimball:  Look, the law is the law.  And I think what we need to do is we need to convince India that there are things that they need to do because of the law.  That does not absolve the administration or the next administration, whatever that is, from reassessing American policy to see whether or not that law is consistent with U.S. national security objectives as they apply to India and elsewhere in the world.  But for now, the law is the law.</P> <P> Henry Sokolski:  Succinctly, it would be enforce the law and then change it later if you have to?</P> <P> David Trachtenberg:  First decide whether or not you have to change it based on a more comprehensive and deliberate assessment.  Then if so, yes, the administration, whatever administration is, can always propose amendments and changes to the law.</P> <P> Henry Sokolski:  The law is a stumbling block with the Indians right now; that is the problem.  Go ahead. </P> <P> Daryll Kimball:  The law is the law.  I do not think Congress is going to pass another law.  There are staff members from the Senate and the House in the audience.  I do not think that is going to happen.  India and the United States negotiated the 123 bilateral agreement that is, in my view, ambiguous on several issues relating to the Hyde Act.  Congress is going to have to take a close look at what the interpretation of the 123 agreement is vis-à-vis the Hyde Act.  </P> <P>The first of my presentation was that it is in the United States national security interests in this particular situation to make sure that the Nuclear Suppliers Group, other nuclear suppliers follow the same basic and these are very basic standards and restrictions that the United States Congress has mandated.  If not, we are shooting ourselves in the foot.  We are opening a door for others to commit sins that we would not ourselves want to commit.  That is an immediate situation, what is before Congress and the administration.</P> <P> Kohit Tripathi:  The law exemplifies exactly what is wrong with the process; it has been turned on its head.  The deliberations, the discussions, the analysis that should have been in before passing the law were never done.  And I just want to add one more thing here.  I had a chat with a senior political leader in India a couple of years ago; I was at that time really worried about how [inaudible] was going.  And he said, Do not worry.  This is not going to -- it s going to die in India.   And I think it will.  If future administrations on either side want to pick it up, I think it will have to be replaced with something that is more inclusive and more thought-through. </P> <P> Raghubir Goyal:  Raghubir Goyal with India Globe and Asia Today.  A quick question:  One, whether this deal will go through or not.  And second, as far as talking about the next administration, if this deal does not go through what will happen as far as talking about India-U.S. relations and working with India on many other fronts and counting China and all that?  Will China attack India or what?</P> <P> Daryl Kimball:  Well, I do not know what Congress and the left parties are going to do later this month, if they are going to move this.  I think time is already out for taking this to the IAEA, to the NSG, and then getting a 123 Agreement back to the United States Congress before they are ready to get out of town for the election.  I think time is already basically out.  </P> <P>What the next administration does -- it depends on who the next administration is.  But I do not think that in the final analysis the NSG is going to if it gets that far going to allow for a clean exemption for India.  There is a critical mass of countries that are interested in at least establishing standards that are similar to what are in the Hyde Act.  And India may not like that.  If that happens, they may walk away from the deal.  That is another quiet death scenario.</P> <P> Kohit Tripathi:  I mean, your conclusion is inaccurate that China is going to attack India because of the that is a really farfetched idea.  But I do not know about the future, the next U.S. administration, but I can say one thing:  That the next Indian administration is going to be a coalition government.  It is either going to be the NDA, which is in opposition today, which has already opposed the deal, or it is going to be the same United Progressive Alliance that we have today, of which the left is a part of.  </P> <P>So I do not see the internal political debate in India going anywhere.  I mean, the left is going to keep meeting with the Congress Party and the other coalition members.  I think it is a stalemate over there.  It must be said here, though, that I fundamentally disagree with the left opposition because their opposition is emanating purely from anti-American sentiment; there is no other principle at hand here.  Seriously, because they said, Okay, it is fine.  If you are dependent on nuclear fuel on Russia or France, that is all good; that is all fine.  But not America.   So they can t have it both ways.  </P> <P> Frank Fletcher:  Frank Fletcher for Henry Sokolski.  Potential lessons that could be applicable to the Indian case from other successes such as South Africa, Argentina you might be familiar with?  Well, I think there was a success.  I remember you discussing once with respect to South Africa, convincing them to give up their nuclear program.</P> <P> Henry Sokolski:  No.  I think it was a rocket program.  Well, I do think </P> <P> Frank Fletcher:  And Argentina and other countries.</P> <P> Henry Sokolski:  Yeah.  Argentina is a different case.  Argentina is a different case.  The South African case that you referred to had something to do with money and losing it.  They thought - the South Africans - that they were going to make money launching satellites using an Israeli launcher.  We were less than thrilled with this example because a satellite launcher is an ICBM-capable rocket.  So we simply said, Look, we cannot help you but you can help yourself.  Go see if you can get any private money to support what you believe is a profitable and necessary activity.   </P> <P>After 18 months, they terminated the program.  They did try.  One of the most interesting aspects of nuclear power is the lack of private investment backing of it.  You cannot find a private bank investing in nuclear power yet without government guarantees, tax credits, insurance caps, licensing ram-throughs, to be blunt, and the like.  And probably all of them.  </P> <P>As I will explain later today, God s invisible hand is trying to help us and we are fighting Him every step of the way.  Perhaps, that is not so smart.  And particularly in a place like AEI, we should be able to talk freely about market mechanisms.  So there might be something there.  The problem is the government of India runs the utility industry; it owns it.  There is a problem there.  Perhaps, one of the things that would help in general across the board is freeing up those kinds of ownership problems not only in India but elsewhere as much as possible.</P> <P> David Trachtenberg:  Just a quick comment based on that, if I might.  My sense is that nonproliferation agreements are only as good as countries willingness to abide by the restrictions in them.  In that respect, this is very much like arms control.  I would suggest that perhaps there are other, perhaps, domestic reasons why other countries decided not to go the proliferation route that might be exclusive and not solely based on the nonproliferation norms in regimes currently in existence.  </P> <P> Kohit Tripathi:  I just want to say these discussions, the conference, the amount of time and energy that has been expended on addressing the nuclear deal -- I feel that the discussion on nonproliferation is legitimate in its own place; the discussion about India-U.S. relations is legitimate in its own place.  But I do not see any connection.  I do not see forging a connection is of any use.  I think they are completely orthogonal ideas, which have been forced upon us because of this deal, which was not thought through.  So I hope that we can de-link them at some point and really move forward on what is, in my opinion, a crucial partnership between two of the most prominent democracies in the world.</P> <P> Male Voice:  Ditto.</P> <P> Jasmin Malekpour [phonetic]:  Jasmin Malekpor from the American University.  I also got a question for David Trachtenberg.  </P> <P> Henry Sokolski:  There is an entire class of you.</P> <P> Jasmin Malekpour:  Yes.</P> <P> Henry Sokolski:  Could you all stand?  All of you, all of you.  Come on, there are more than that.  </P> <P> David Trachtenberg:  You are not all going to ask me a question, I hope.  You only get one question from the class.  </P> <P> Jasmin Malekpour:  So I m lucky to be the first one, then.  You talked a lot about national security and United States national security.  Do you believe it is in the interest of U.S. national security to hollow out international -- or establish international regulations by circumventing them for the sake of hedging China, and therefore, potentially risking international security?</P> <P> Henry Sokolski:  Do you beat your wife?</P> <P> David Trachtenberg:  That is a tough question.  I do not think I can give a yes-or-no answer to that one.  I think U.S. national security consists of so many variables and factors and components.  The desire or necessity in some people s minds of either containing China or what-have-you factors into that, certainly.  But I think we need to weigh each of those considerations and come to some kind of consensus to the degree that we can on how to weigh them and which goal or security objective may be more important in a particular circumstance than another.  I do not think it is an easy black-and-white answer is what I m saying.  But I think those are part of the factors that need to be considered as part of this reassessment that I would like to see.  </P> <P> Henry Sokolski:  An even odder event:  We are going to conclude slightly before schedule.  Let me close with just two comments.  One of the takeaways I take from this is that if you believe China can be counterbalanced by India and that India wants to counterbalance China militarily, well, rules-schmules.  You just go ahead, yes?  I think that is sort of what has animated a lot of the talk on the Hill quietly.  </P> <P>I m reminded of many things, though.  It probably is the case that India and China have a lot of trade.  I think they are the closest two trade partners right now.  That even if India wanted to go toe-to-toe with China, it would take a few years before they could.  Until then, I do not know how willing anybody in India is to go toe-to-toe with China in a big, big way.  Some might, but that is a bit problematical.  So that opens up the question of time.  </P> <P>Finally, one last comment.  I used to work for a fellow, Harry Rowland.  And I remember, many years ago - we are talking 18 years ago - he had to go to India and Pakistan.  When I gave him some talking points on India, he kind of waived them aside.  He said, No, I am not going to talk about rockets or reactors with the Indians.  It is a neuralgic topic.  We want to talk, instead, about immigration, trade, and what my young son is involved in, which is computers.   I think Harry Rowland is a pretty bright guy; he still is.  And somehow, we surely want to be talking as much about those three topics as reactors and rockets, no matter what; no matter whether this deal goes forward or not.  With that, on to lunch.</P> <P> Danielle Pletka:  Excuse me, everybody.  We are going to break for an hour.  The lunch is out in the hall, if I can invite everybody to help themselves - just sandwiches and drinks before we start our next panel.  Thank you.</P> <P> </P> <P>Panel III: Beyond the NPT: What s Needed?</P> <P> </P> <P>Danielle Pletka:  Good afternoon, everybody.  If I could ask you all to be seated.  Thank you to whoever is slamming their cutlery on the glass.  Good afternoon, everybody.  Welcome back to those who have been here for the course of the day, and welcome to those who have joined us for this panel.  I m Dany Pletka, as, indeed, I was this morning; vice president for Foreign and Defense Policy Studies here at the American Enterprise Institute.  </P> <P>This is our third and last panel of the day.  I m very pleased to have three terrific speakers; men, in this instance, with lots of ideas, who do a lot of thinking, not just about the day-to-day politicking of proliferation but, also, about the greater questions that challenge us and, more importantly still, some of the possible answers to those questions.  It is a great opportunity for us to look forward.</P> <P>We have with us today J.D. Crouch, who is a senior scholar at the National Institute for Public Policy.  Until May of last year, Mr. Crouch was the assistant to the president and deputy national security adviser.  He has a long and illustrious resume that I think gives him lots of credibility to talk about these issues.  We also have, next to me, George Perkovich, who is the vice president for studies at the Carnegie Endowment for International Peace.  He oversees all of the research programs in a whole variety of different subject areas at Carnegie, but his own research has focused on non-proliferation questions.  </P> <P>And finally, Henry, who I think probably, needs no introduction, having been with us for the course of the day.  He is the executive director of the Nonproliferation Policy Education Center and the partner with us.  I like the name, Henry.  I like the name.  We can have a vote at the end as to whether Henry should change the name of the Nonproliferation Policy Education Center, which he professes not to like and I think he sounds very serious.  In any case -- and our co organizer for this conference.  </P> <P>Now, I will only make one comment before going forward.  And that is that somebody directed a snippy comment about my letting people go on too long.  And so, Henry?  Yes?</P> <P>Henry Sokolski:  [Inaudible]</P> <P>Danielle Pletka:  And in the what-goes-around-comes-around department, now that Henry is on the panel [cross-talking] exactly.  That is certainly my motto in life; ask my husband.  Let s go on.  We are all getting a little silly having spent the day together.  Let us go on.  I think George has initially agreed to start us off today.  So thank you very much.</P> <P>George Perkovich:  Dany, it is a pleasure to be here and to be between you and Henry because what I think is the greatest curse in life is to be bored, and when I m around you guys I m never bored so I appreciate that.  And I think, Henry, your name is fine.  I would keep it.  Henry, that is.</P> <P>What I want to do is kind of sketch an overview response to what I took to be the question about kind of going beyond the NPT.  It will be rather general and so maybe in the discussion we can kind of draw out some specifics.  But I would say that we are in the midst of searching for a new nuclear order, a new global nuclear order, and there are three forces that are driving this search.  One is the hope-for, or expected, expansion of nuclear energy production worldwide.  So that is both a growth but also a new distribution of where that capacity is, which is primarily in Asia and other developing countries; whereas, in the past, the pattern was located in different places.  </P> <P>The second driver is the fear, especially in the U.S., of proliferation; that is, proliferation to states but also to non-state actors.  That fear of proliferation kind of rose after the end of the Cold War to the top of, first, the Clinton administration s list and then the Bush administration s list of national security priorities.  </P> <P>And then the third factor, I think, that is driving the search for a new nuclear order is demand in much of the world for more genuine, or obvious, commitment to nuclear disarmament on the part of the states that possess nuclear weapons; I will come back to that but I think within that demand for disarmament, it is a proxy for a general demand for greater equity in the international system.  So it drives, in part, from the symbolic importance of nuclear weapons as measurement of international status and distribution of power.  So this demand for disarmament is not just about nuclear weapons; it is about greater equity.  </P> <P>I would say the biggest factor - and we tend to, I would say, under-appreciate it - the biggest factor kind of underlying these drivers is that the Cold War ended.  I mean the non-proliferation regime was a product of U.S.-Soviet agreement and cooperation; it was a condominium project of the U.S. and the Soviet Union.  The NPT began as a joint draft of the U.S. and the Evil Empire.  It was imposed on, basically, the rest of the world because the two superpowers agreed on this thing that whatever their differences, whatever their strategic competition, they both agreed they did not want anybody else to get nuclear weapons.  And so, they worked together on it.  </P> <P>Well, when the Soviet Union collapsed, when that bipolarity ended, we shift to this more unipolar system of U.S. hegemony.  And in many ways what we have been dealing with in the nuclear order since then is a form, a kind of resistance, to unipolarity, which is kind of natural in many ways.  But we tend to forget that it is also hard to achieve the same results through nonproliferation when you are one superpower compared to when you have a bipolar system where both poles agree on the objective.  </P> <P>I think we underestimate how difficult, therefore, creating this new nuclear order is going to be.  There is a tendency to view it as kind of a software upgrade where we are going from 1.0 to 2.0.  And, yes, it is a big deal and there will be glitches, but it is the same basic architecture; we kind of know how to do it; the same basic marketing apparatus.  Maybe, they will change the commercials but it is that kind of upgrade.  </P> <P>And the central feature of the upgrade, from our point of view, of what is being sought by the U.S. but also by most other Western states, especially the nuclear weapon states -- that central feature is we do not want fuel cycle capacity to be acquired or operate in states that do not have it now.  I mean, if we were asked, if President Bush, if others in this room were asked, What is the biggest difference that you are seeking, it is no more enrichment or separation in new countries.  And we say we think that is just a basic -- a little bit advance or modification of the existing software or system.  </P> <P>But the rest of the world does not see it that way at all.  To many, the view is, Yes, you may think this is an upgrade but we actually feel like you screwed us when you sold us the first package in the NPT in 68 and then the indefinite extension of the NPT in 95.  There were terms that you offered and promised that you still have not delivered on.  And it turns out you are supplying and servicing the people -- some of the people who brought your original software the Indians and others you are servicing them just fine, and the Chinese and the - but a lot of us, you do not return our calls.  We are on hold forever at the call center, and we cannot get the fixes we need.  We do not get the same security upgrades.  We are not actually interested in buying the upgrade from you. </P> <P> And moreover, since you sold us the first one, there is now this thing called open source and we can actually develop the software we need through open sources; in this case, it would be access to centrifuge technology.  And so what we are going to do, actually, is block your effort to develop new rules that would deny us access to open source software.  We are going to prevent you from having a monopoly on this technology.   </P> <P>In many ways, this is where Iran comes in as kind of the demonstrator of this other way of doing things.  And it creates, in essence, kind of a new currency.  Instead of you have to have bombs to get everybody s attention and to have your neighbors feel deterred and have your neighbors start accommodating you and so on, now it is if you have centrifuges -- centrifuges are the new black, like brown is the new black in fashion.  And it is a lot better because you actually do not get whacked if you stay within the rules and have centrifuges and not a bomb.  You can argue that that is within your rights; other people agree it is within your rights.  And at the same time, everybody thinks you could have a bomb and starts to give you the deference and you acquire some of the power that you want from it.  </P> <P>Another thing about this kind of environment, in addition to the open source code, is that the end of the bipolar system creates a lot of opportunities for new actors to become major powers.  They may be major regional powers but they have aspirations to be global powers, which was impossible during the Cold War when you had kind of the two superpowers with a lock on this.  So you look at India, for example, and its emergence and drive to be a major power.  China is obvious.  But South Africa has a similar kind of ambition as to be a regional pillar of the international order; Brazil similarly.  </P> <P>It is not an accident, I would say, that each of these countries I have mentioned - Iran earlier, South Africa, and Brazil - they all have enrichment programs now that they are refusing to consider constraining in any way.  They are saying, That is out of bounds.  And so this new order that you want to create predicated on the fuel cycle -- talk to somebody else but you ain t talking to us because we are not agreeing to any constraints.   And I think it is not about security fears they have, but it is this sense of in this international system of ways to rise up as major powers with the currency that we established, basically.  And they say, We want that, too.   </P> <P>So to summarize the problematique, as it were - because Bruno is here - we have a situation where the expansion of nuclear energy will cause proliferation and insecurity if it does not happen without reliably enforced rules.  But the necessary new rules to make nuclear energy secure will not be agreed to without a not-yet-defined plan for nuclear disarmament, which itself will not be produced.  That plan for nuclear disarmament will not be produced if there is a fear of proliferation.  </P> <P>And so, it is a circular problem of industry driving proliferation and proliferation kind of both undermining the possibility of disarmament, which could help regulate industry, and that is kind of where we are stuck.  Now, it seems to me it is a circular problem and that the only way out of it, really, is and to use Henry s phrase I mean it is basically a system of country-neutral rules that you have to in a situation like that have rules where what you are demanding of others is what you are prepared to accept for yourself.  </P> <P>It requires then a change from the double standard system that we have had since 68 and 95, which again, could be imposed because the two great powers agreed on it.  But that double standard system is not survivable, nor is it stable; it is inherently unstable, and we are dealing with that instability now.  So the only way to get a stable, predictable system is a set of rules that apply to everyone.  That entails, therefore, a clearer commitment to seeking the objective of nuclear equity at zero weapons or some proxy that is agreed to that.  And we can talk about whether and how that could be done.  Obviously, this is not anything unilateral; it would have to be a collective effort.  </P> <P>But without that kind of commitment, it has become very clear, I think, that others are not going to agree to the kind of upgrades of the rules that we want them to adopt.  So then, the alternative is greater nuclear anarchy, which is what we might be confronting.  And then, we might be able to manage that; we might be able to win; you might be able to manage it with regime change and military strikes and PSI, which I support.  You physically just kind of get up and try to manage the problem through interdiction.  </P> <P>But my sense is that the threats and the risks are too alarming to us, maybe, even excessively alarming to us, but too alarming to allow us to rely politically for a long time in this kind of ad hoc guacamole, try-to-push-back-where-you-can strategy.  The people will want something more systematic and durable.  And if that is the case, then this order, I would argue, has to be much more equitable than the one that we had there.  So let me stop with that general framework.  And in the discussion, we can argue about it.  Thank you.</P> <P>Danielle Pletka:  Henry, 10 minutes.</P> <P>Henry Sokolski:  Right.  Actually, you can say anything you want.  I think we are all for temperance.  Not every one of us is for prohibition yet, though.  I think tying temperance to prohibition is not a smart way to reduce alcoholism.  It is just too severe.  I will leave you with that analogy as I go forward.  </P> <P>It seems to me we need to go with some forces that are on our side.  One of them is military science.  If you take a look at the aggregate equivalent megatonage in the stockpiles of the Russians and the U.S. and you look at the number of warheads that are deployed, certainly in the strategic stockpiles, from about the mid- to late 60s, it is like this - significant.  Now, that was not because somebody at the Arms Control Association whispered and someone hears, Let s get rid of them; it had to do with the advance of the ability to hit targets precisely so that you did not have to use indiscriminate explosive power to hit everything else that you could not hit.  </P> <P>Bottom line is there is a trend already in place that is going to continue that is quite leveraged that we want to exploit and are exploiting now.  Even the Bush administration that everyone vilifies has been reducing deployment numbers because of this military scientific revolution that has been going on quietly; computation, target acquisition, sensors, and the like.  </P> <P>What we want to do then is ride that wave and try to eliminate obstacles for riding that wave.  One of them would be proliferation, I think.  Now, here, I do not know; it is one of these cognitive dissonance things that we want to have our nuclear power cake and eat it, too.  And so we make these arguments about how, well, we can have nuclear power so long as we do not have nuclear fuel.  </P> <P>My guess is if you ask most people, they do not know what enrichment or reprocessing is; they do not know what a light water reactor is.  They are either pro- or anti-nuke.  So good luck in the policy world splitting these hairs with other diplomats; I mean, it is an educational experience, but it has never been that fruitful for me.  I know that.  The idea, as you have raised, that you can somehow bribe people not to exercise rights that you assert they have -- well, not a great history there.  </P> <P>So, general conclusion, and then I will get into my brief.  In the hard cases - the Irans, the North Koreas - a lot of nuclear spilled milk.  I think you are going to have to think about a Cold War.  You are going to have to hope things get better.  It is going to take time.  I do not see any quick fix there.  No way.  </P> <P>With regard to an awful lot of other cases, though, I think if we stop giving green lights to all sorts of notions that people have per se rights to things, it would help at least be a little more contentious about these things.  It seems to me that, building on what George said, we do have to make the rules stronger.  They are kind of a joke right now, at various levels.  We will get into that.  </P> <P>Also, I think there is an awful lot of energy experimentation that can be done through international banks and by implementing I see my friend from the Senate here the Lugar-Bayh Bill, which has a provision in it implementing the Nuclear Nonproliferation Act, which has a Title Five; it has never been implemented - bipartisan inattention.  It calls for encouraging cooperation in non-nuclear, non-fossil fuel energy projects around the world.  I think, in fact, there are a lot of things we can do besides nuclear energy to deal with things.  </P> <P>Now, let s get into the brief, if we may.  This is roughly the world on proliferation.  We are the biggest ball.  We tame the situation with regard to complexity by making everybody an ally, except China.  We cannot figure out what it is.  Also, we assume DPRK is going to give everything up and Iran will never get the bomb.  But, roughly, that is what we have got.  I made this chart about five years ago; it is still pretty good.  And you can live in that world.  </P> <P>This is what we got to worry about.  This is a world where you certainly know who your friends are, you certainly know who your enemies are, but you do not know how well-armed your enemies would be or whether you can count on your friends when the chips are down because either they got bombs or they are months away from them.  In this world, military science and diplomatic cabling and all of that kind of becomes puffery.  You have to be a god to think you could pull through on something like that.  There are people who believe that but 1914 is what happens, usually.  They get caught up short.  </P> <P>You saw in a previous briefing why there is concern.  There are a lot of countries that are interested in nuclear power.  Now, there was a lot of glib talk about, Well, you have a power plant.  That is something and the fuel cycle is something else.   History does not really work that way.  If you take a look at the countries that have declared civilian programs first and see how many have broken the rules, how many nuclear weapons program or acquired nuclear weapons, it is quite a list.  We are banking on the [indiscernible] history ain t going to rhyme.  Probably, I will skip that.</P> <P>The argument is the reason it will not is because IAEA safeguards are going to come to the rescue.  I m going to go through five recommendations here and I will not bother with the view graphs.  There is a book that you probably picked up; this was covered by The Economist.  One of the highest accolades I have ever received from the IAEA came as a result of this book.  The Economist and Reuters asked the public affairs people whether they had read the report in here.  And they said, Yes.   And then, they asked, Well, do you have any comment?   And they said, No, we do not want to comment.   So it is a pretty good report.  I think it touched a number of nerves, and rightly so.  </P> <P>The key recommendations there have to do with toughening up the rules.  It would be nice and important to actually have the ability to see where spent fresh fuel rods are at all times.  We do not have that and we do not have it in the worst countries.  That can be fixed; technically, it costs money.  Do it.  </P> <P>Also, you need to get the agency to distinguish between what it can safeguard and what it can only monitor.  Safeguard is when you can detect a diversion before it is completed and prevent it from being completed.  Monitor is maybe you can find out reliably if something untoward happened after it has occurred.  They need to admit that when it comes to fuel making, at the very least, and maybe even real time onload fueled reactors, they can only monitor.  </P> <P>They need to make these distinctions and they need to struggle with that.  One of the ways you do that is have maybe that wonderful intelligence apparatus we have and, in other countries, to point out the obvious.  They know this but they do not want to say it out loud.  There are lots of spare staff; we could do this.  </P> <P>Also, it would be useful to pay for things by having those that are inspected actually pay for the inspections.  We forced Taiwan to do this; it ought to be the model for everybody.  And by the way, that means the United States and other countries, like France, would pay a lion s share of what would go into the safeguards budget.  And I think that is about right because we have the most to benefit from not seeing the bombs spread.  </P> <P>So the fourth recommendation is U.S. officials to stop promoting the view the NPT recognizes per se right to make nuclear fuel; I will not get into that other than to state it.  And then every person who works in this field, whether they are right, left, or center, has to say something nice about the French and Pierre Goldschmidt and their proposals.</P> <P> Male Voice:  He is Belgian.</P> <P> Henry Sokolski:  Well, I said French and Pierre Goldschmidt; I did not say he was French.  I only note that some of those ideas came from an NPEC gathering.</P> <P> Male Voice:  Goldschmidt does not sound too French to me.</P> <P> Henry Sokolski:  Anyway, the fact of the matter is you have heard these proposals.  Basically, you need some automatic country neutral sanctions for violators.  Having said all that, I would like to go to 21.  I have got it here so we can do that.  The real burden of what I would like to emphasize today is not what is in that book, which are the bare minimum things.  It is rather this point and this is what could help propel a new way of looking at things because I think if you go directly to the question of nuclear weapons and rights and such, you get into these enormous hoohahs, and you do not get anywhere and people hate you and there is acrimony.  </P> <P>Here, it is just a simple proposition.  You know, it is stunning but no private bank has yet chosen to fully finance a new nuclear reactor build.  No private insurer has yet chosen to fully insure a new nuclear plant against third party offsite damages.  Every government where nuclear power plants operate have heavily subsidized their operation.  By the way, we are going backwards.  We are getting worse than we were even in the 80s and 70s in the U.S.  Every government talking about building nuclear power plants is considering some form of financial guarantee.  </P> <P>We are fighting the market.  Here is where the market is going as far as views by DOE, Nuclear Energy Institute, to utilities, a consensus board of utility people and environmentalists and Florida Power & Light.  Essentially, the overnight nominal cost for building a new power plant is going up.  Within just 36 months, it essentially has risen threefold and there is no end in sight.  The latest thing to come out of Florida Power & Light Commission -- $12 billion may need to be spent - this is a high-end estimate, to be sure just to bring a single nuclear power plant on to the grid.  By the way, do any of you have a mortgage?  No?  How about a 40-year note on $12 billion?  </P> <P>Well, you would in the U.S. because what happens is the loans are guaranteed.  But if you had to pay it for yourself, I would not recommend it.  What this suggests here is that against various competitors, these dollar figures start to matter.  Also, this whole question of coal.  </P> <P>Now, this institute is very good about ethanol.  The AEI institute is and like Heritage and the Wall Street Journal - very good in railing against ethanol.  Ethanol -- for each ton of carbon displaced, it costs about $600 for each ton.  Now, using industry figures, which I think are probably half of what Florida Power & Lights figure is or a third, it is somewhere between $120 and $200.  So we do not know where things are going but someone should say, Holy cow.  Nuclear could be like ethanol.   The number of times you exceed the credits and the EU price for carbon -- they are 3 to 5, and hydro is off the map.  Those numbers should matter.  </P> <P>This leads me to a suggestion.  All three of the candidates - McCain, all of them - are in favor of a follow-on to Kyoto.  Now, I do not know how serious they will take that, but they seem to think it is very important.  There are two agreements which, I think, were reached during the Clinton era although not at the behest of Clinton, that we are parties either to or uphold the principles of.  One is called the Energy Charter Treaty and the other is the Global Energy Charter for Sustainable Energy Development.  I obviously got that wrong again.  It is the Global Charter for Sustainable Energy and Development.  These things collectively uphold the principles of state the full price of an energy project, including the subsidies, competed openly, internationally in open bidding.   </P> <P>If you did that my suspicion is it would put downward pressure on nuclear.  We have looked at pricing nuclear projects in the Middle East; they actually get more expensive there for reasons having to do with corruption and other things.  Also, it would be good if the environmentalists who are economists who are saying, Stop subsidizing things, were listened to on the Right.  The Right actually should not be in favor of fuel-specific subsidies, additional ones.  And identifying the full cost should be something that we ought to encourage everyone to do.  </P> <P>If you did that, I think what you would find is you would have a prevailing wind that would make everything slow down a little bit.  It would then make it possible to do something that you actually want to do, I think, and I want to do.  The Nuclear Nonproliferation Treaty actually says that it will share the benefits of peaceful nuclear energy.  That would mean that we ought not to read the rules in such a way that if something loses money, brings you to the brink of having bombs, and cannot be safeguarded, is okay.  This will help you get back to that sound reading.  </P> <P>Finally, one last comment, and this is it.  If you go to the Acheson-Lilienthal Report, which I recommend everyone do, there is a clause in the back.  And in it they said, How will we determine who will get nuclear power plants since the world authority for nuclear energy is going to allocate the plants?   No one could figure it out and someone came across a great idea.  They said, Well, countries that have a lot of oil or gas and hydro, they would not need it.   </P> <P>The way to prove it is you would open it up to bidding, and whatever was cheapest should win.  I think we need to get back to that kind of fundamental arms control principle, which is to let the markets have more of a say.  If, in fact, nuclear energy is economical and I m wrong, I do not think we are going to stop it with all the understandings anyway.  But I really suspect that God is on our side on this, and we should give him a chance.  On that note --</P> <P> Danielle Pletka:  Thank you.  J.D.</P> <P> J.D. Crouch:  Great.</P> <P> Danielle Pletka:  Thank you.</P> <P> J.D. Crouch:  It is always great to learn that God is on your side.  </P> <P> Henry Sokolski:  That is right.  So religious.</P> <P> J.D. Crouch:  But anyway, thank you, Dany, and, also, everybody for showing up today.  I appreciate the insights not only of my friends and panelists here but also the others.  I m not going to sort of run down a laundry list of what I think are some of the changes that might have to be undertaken in terms of our entire approach on non-proliferation.  I agree with much of, for example, what Bob Einhorn said in his presentation about some of the things that need to be done.  </P> <P>What I wanted to do, with the limited time I had was sort of focus on a couple of issues that have been bothering me on this question and just get them sort of on the table as something to think about.  I suspect that not everybody will share my assumptions and the like, but at least maybe it might be the kind of thing we can debate here.  </P> <P>It seems to me that I have two, maybe, arguably, modest objectives that I definitely want to try to make sure as U.S. government policy we can make these happen.  The first is I think avoiding some kind of large-scale, time-compressed proliferation, where you have got -- some people used various terms to describe it but it is a lot of countries coming online with nuclear weapons in a very short period of time.  </P> <P>Now, that is pretty modest because a lot of people would argue that while any new additional state is sort of the end of the world and while additional nuclear countries are probably not in our interest - although there is a debate on that question, as well - certainly, the effects on the international system of a number of countries coming in under a very short period of time is pretty much recognized by everybody as being something that could create a lot of instabilities.  </P> <P>And the second thing I think we ought to try to avoid and this is sort of obvious but we have not really talked about it much here - is avoiding a nuclear terrorist use because it is quite possible to imagine any number of scenarios where a nuclear weapon could be used state-to-state.  But as badly as we understand that problem, we really had not thought as much about the world of nuclear terrorism.  </P> <P>So let me begin by throwing out some assumptions that I m operating from.  They are challengeable, and I even challenge them myself so I m still thinking these things through.  The first is rogue states are going to acquire nuclear weapons.  I think Henry s slide is right.  Unless we are willing to compel them to abandon them, and probably by force -- I think there are tools out there that we could use more effectively.  There are stronger sanctions.  I actually think some of the stuff that was done during this administration early on vis-à-vis North Korea on the financial side was very creative.  But, frankly, I m not sure it would get you there.  I mean, I cannot say it was enough to stop -- just because of the strong impetus, I think, for these rogue regimes to have nuclear weapons.  </P> <P>Second, as we look at the key security challenges that we will face in the future -- I think the first one is violent Islamic extremism.  And that, of course, is very much tied to this issue of nuclear terrorism.  Secondly, managing the rise of China.  These are the central security problems that the United States is going to have to face as we look out to 2050.  My daughter and son are going to have to, I think, deal with those problems.  If they get there safely, then maybe there will be new problems they will deal with.  </P> <P>Third, there has been a lot of discussion about nuclear energy here.  I tend to think nuclear energy will expand but I think it will expand very modestly.  I think it will expand horizontally more than vertically; that is to say, I don t think it is unreliable to even retain the percentage of electricity output that it currently has simply because it is very difficult to build plants and energy demand is rising so rapidly.  So I m not debating whether it should or it should not; I m just positing that it probably will.  We are going to have nuclear power plants in more countries that we are going to have to deal with.  </P> <P>On a brighter note, I actually think very few countries really want to have nuclear weapons.  I mean, if you think about the state system as roughly 200 countries, there is no pell-mell rush to this.  That is sort of on the positive side.  But I do think Henry s points and some of the other points made that the interactions among countries as well as the desire for countries to sort of step out into a multipolar world will create incentives for, maybe, handfuls of countries to want to do that.  And there will be increasing pressure, I think, on U.S. allies in some cases to develop nuclear weapons programs or at least a virtual or late nuclear weapons program, especially in Asia and the Middle East.  </P> <P>Obviously, nuclear terrorism is real.  It is a hard problem.  But, again, another assumption for me is it is not completely insensitive to traditional forms of dealing with it; deterrence, for example.  And I ll want to talk about that in a second.  </P> <P>So with that as kind of a backdrop, the two things I really wanted to talk about are the issue of what role does the United States play, in effect, as an assurer in an increasingly proliferated world?  And secondly, what are some thoughts about how we might deter and advance our tools to deter nuclear terrorism?  </P> <P>The NPR, which you know I m very associated with, took the framework that came out of the QDR, which is essentially that top-level goals of U.S. security policy were to assure, dissuade, deter, and defend.  And assurance, I think, is not something that you simply have nuclear weapons for; you have an entire national security apparatus for that.  It is really the role that U.S. national security policy and in some cases, particularly, our military forces play in assuring allies that the U.S. alliance and other defense commitments are sound, and it has sort of positive and negative goals.  </P> <P>Obviously, the positive goals are to strengthen our national security, enhance our freedom of action and by maintaining alliance structures, which we think we need to do.  We need to continue to do that and other defense arrangements that give the United States the ability to operate globally but especially in areas that are important to us, along the periphery of Eurasia and Africa and the like.  </P> <P>But it also has important negative goals, which are really to prevent states that are allied or friendly to us from taking actions that are injurious to what we think is our security or international security and otherwise destabilizing either the international system or regional destabilization.</P> <P>Now, if you think about the Cold War context of this, leaving aside that the only use of nuclear weapons, the nuclear weapons policy really came in to existence in a way as a result of the desire to assure allies to extend deterrence outside the American homeland.  And, indeed, I would argue that it did that; it had multiple goals.  But an important one, obviously, was trying to deter the Soviet Union from a massive conventional and then later nuclear attack in Europe or Asia.  But at the same time it took on important nonproliferation goals because those security commitments are important to countries and the importance of those security commitments have waxed and waned over time.  But I think that as we look forward, it is more likely in my judgment that they are going to become more important in this multi-polar world.</P> <P>So if you think about it, deterrence as I said began as extended deterrence.  We adopted it as the situation in the Cold War changed and as our allies concerns about it changed.  We ultimately reduced many of the instruments of our extended deterrent capability, particularly in Europe, but also in Asia as a result of very propitious developments in Europe and the collapse of the Soviet Union and the like.  And we followed suit in Asia, although the changes there were not quite as radical.</P> <P>But we are now under very different circumstances; the current environment, I think, is characterized by the following situation:  One, a perceived decline in U.S. nuclear capabilities - in some cases, people want a decline in U.S. nuclear capabilities - but at the same time, a continued reliance on those capabilities.  An increase in the number of the nuclear powers in the world particularly North Korea and, certainly, the expectation that Iran will move in that direction.  The rise of China and India and, in some sense, in my view, the problem in China is their need to find a way to get rich and stable and prosperous and the respect that they want before they get old.  And so they have a timeframe that they are operating in.  </P> <P>And at the same time, something that is sort of unique in this is, again, Asia hands can go into some more detail than me.  But, typically, the international system in Asia has been characterized by either a strong Japan or a strong China and what we have today is a strong Japan and a strong China.  And that is going to create, I think, potential for instability there that will make the U.S. role all the more important.</P> <P>We have a resurgence of Russia, particularly on the energies side and particularly an interesting reliance by Russia on nuclear weapons, which I find, by the way, not at all surprising.  I think the Russian reliance on nuclear weapons -- it reminds me of Operation Solarium and the Eisenhower administration s New Look Policy; if you do not want to spend a lot of money on conventional forces, buy nuclear weapons.  And I think that is the way they are headed.  NATO is very divided and there is another thing that is growing in the United States and I will spend some time on it - the abolition movement, abolition of nuclear weapons.</P> <P>So what do I think are some of the implications for this?  I have mentioned already.  I think assurance -- assuring allies and the extended deterrence component of that are more important in a multi-polar and proliferating world.  You know somebody - I think it may have been Bob - mentioned that when Secretary Rice went to Japan she made these over statements vis-à-vis the North Korean threat and she is quite right that the Japanese were very grateful of this.  Interestingly, from what I understand, the Chinese also expressed their gratitude about these statements, which shows you that they themselves sort of see the potential for instability in the region if, in fact, these kinds of commitments are not met.</P> <P>Extended deterrence is more than being able to cover targets.  Assurance as a component has a political and political-military character to it.  And so that means that we have to find ways of working with our allies in the creative ways we did during the Cold War which while they -- we tried to stop British and French proliferation; we were unsuccessful in that particular case but we were able to stop German proliferation and a number of other countries that were potential proliferators in Europe and Asia as a result of those security relationships.  </P> <P>We have several proto- or virtual nuclear weapon states, I think, that could make go/no-go decisions on real programs in the next 10 years, either overt or covert, based, in part, I think, on their assessment of the U.S. assurance power and commitment.  And I think this is especially true in the case of Asia and extended nuclear deterrence but I think it may also apply in the Turkish circumstance and it may also apply in the Middle East as well.</P> <P>So against that backdrop I worry about the abolition movement in that context.  Now it would be no surprise to you that I think nuclear abolition is likely not possible; I think it would be unprecedented, in fact, in the history of the human race for people to give up the most powerful tool.  Unless it, of course, obsolesces, which it may well like every other -- we do not carry longbows any more.  But the prospects of people not wanting to give that up and, indeed, the prowess of American advanced conventional capabilities have somehow, ironically, made that capability even more important for countries.  </P> <P>I do not know that it is sustainable either and I think over time it would be very difficult to move in that direction; there are lots of problems inherent in it.  And, frankly, the people who are advocating it admit there are lots of problem associated with it and difficulties.  And they focus on it as a goal as opposed to maybe a realizable goal in the near term.  I worry, of course, that it would not be equitable in the way it would be implemented simply because of the way we do things.  But all those are probably not good-enough reasons not to think about moving in the direction.  I am actually concerned that it may not, in fact, be desirable.  </P> <P>And I based that on, really, two arguments.  The first is that I think this assurance component and the retention of U.S. nuclear capabilities is essential to nonproliferation and, particularly, your friends and allies who arguably we have the most influence over.  And it does not mean you cannot continue to reduce the level of nuclear weapons; you can t have follow on agreements to do that.  I think those are probably in the offing.  But maintaining the United States as a nuclear power is going to be very difficult if, in fact, the political objective is otherwise.</P> <P>And secondly, I think the second argument is we have emerged and we have complained a lot about this nuclear world that we live in, but the pre-nuclear world was not so good either.  And we only lost a 100 million people in World War II and I do not know what it was in World War I; 20, 25.  And, of course, arguably if you look at the statistics, there seems to be a discontinuity - a break, if you will - after the Second World War and the advent of the nuclear age that the costs of going to large-scale planetary war - and, yes, I think we can return to that, unfortunately; maybe, it is my view of human nature - are so high that I think the existence of nuclear weapons, dangerous as they are, helps to dampen that.</P> <P>I think I am probably out of time and so I am not going to talk about nuclear terrorism but maybe somebody can ask me a question about it.  Good.</P> <P> Danielle Pletka:  Thank you very much J.D. and thank you for being conscious of the time.  I have not talked very much and I missed our second panel, so I may be speaking out of turn but one of the things that strikes me, not about everybody s comments because I think there were certain exceptions, but about the center of gravity of comments and in general about what to do about the problem of the spread of nuclear weapons and the growing and intense interest of certain states in having those weapons is that there are a lot of rules-based answers.  </P> <P>And while I, like J.D. and others agree with a lot of the specifics suggestions that were made by Bob and by other speakers, which I think are important and creative, it always reminds me a little bit of - let s see if anyone gets this non sequitur - of Idi Amin, former dictator of Uganda.  After he left power and a search of his rather palatial digs, in addition to the Mighty Mouse cartoons, which he had in stock and which he apparently loved, he had films of himself doing various things that he thought were wonderful attainments.  </P> <P>One of them, in particular, that I always remember is a picture of him, of a tank, going up a little small hill.  And it goes up the hill and then it stops at the top of the hill and the top pops open and out pops Idi Amin.  And he announces very proudly to the camera, Idi Amin conquers the Golan Heights. </P> <P>Now why does this remind me -- well, there is a certain tendency to say, Well, now we have done it so that problem is solved.   Well, now we have all agreed that there needs to be country-neutral rules on this.  Hah, thank goodness.  And of course we have a number of existing problems and a number of growing problems that are not actually addressed, even, unfortunately, by the creation of country-neutral rules, as good an idea as that is. </P> <P> And the missing ingredient seems to me to be to figure out how it is that we are supposed to not just preempt but roll back and, in fact, if we are unable to roll back that which has escaped from the genie s bottle, how are we going to be creatively, credibly preempting -- we do not do a very good job at following our own rules.  I also noticed that we have not spent a lot of time talking about the IAEA or the politicization of the IAEA or the fact that we sure could use a Director General of the IAEA who is not like Mohammed al Baradei in the future.</P> <P>Male Voice:  You gave us 10 minutes.</P> <P>Danielle Pletka:  Yes, thank you.  No one even touched on it and I think these things are very important.  I want to throw them out there just as objects of discussion but also because, I think, particularly now, you know, changes in administration, whether you stay in the same political party or you change political parties, are times for good new ideas.  There is fresh energy and new relationships to build and I think this is a real time of opportunity, which is why it is only right that we try and get those ideas out there.  Going back to Pat and my friends in the Clinton administration, the ideas of the Clinton administration in which we signed a lot of international treaties that did nothing and were never enforced is not going to solve this problem for us.  So I just put that out there and that is my piece.</P> <P>Let me open the floor to questions from everybody.  If I could asked you all to kindly adhere to our rules, which are wait for the young man with the microphone; please identify yourself and put your brief statement in the form of a question, please.  And if you want to direct it to somebody in particular, let us know.  Yes, sir right in front.  Kevin is on his way up with the mike.</P> <P> Frank Fletcher:  Frank Fletcher.  My question is for Henry Sokolski.  One of your slides said 136 chances for strategic miscalculations.  What were you talking about and could you give a few examples or some examples?  I thought that was very interesting.</P> <P> Henry Sokolski:  When they were trying to promote the nonproliferation treaty in the late 50 s, the Irish went to the arms control theocracy, if you will, that put out report called The World Without Arms Control.   And one of the things they used to do back then is they would have the countries they thought that would get nuclear weapons and they would draw a line between them and all the other countries they thought that would get nuclear weapons.  </P> <P>Now, at that time you had Russia, the U.S. and Great Britain with nuclear weapons and when you connect those it is a triangle.  And I do not know about chemistry analogies but it looked pretty stable.  You know, okay, three; they can figure out who is on what side and, really, it was just to -- because a lot of Americans liked to think that Great Britain is the 51st state so, you know, it did not look that complex.  </P> <P>But when you put Italy, Sweden, Germany, Japan, France and China on there, it got complicated.  So what I did is just said, Okay let s use that tool and see what it looks like. </P> <P>If you include countries that might get near nuclear weapons plus some that might acquire -- this was done approximately five, six years ago.  What is interesting is how well it has held up.  And the argument is that you would have to have cable traffic maintaining the relationships between each one of these countries with regard to the other possible countries to keep on the pulse.  </P> <P>Or you have would have to have special diplomacy that would make it so that you did not have to worry about all this complexity.  Or you would have to persuade yourself that you had a way to make sure that if war began, it would not get to anything nuclear and everything would sort out.</P> <P>Now, roughly speaking, if you read anything about the history of World War I, everybody thought they had those kinds of answers and it did not quite work out that way.  In fact, I stayed in graduate school for a very long time and read books on how the First World War begun.  I have to say that it is a Talmudic calling; it really is hard to figure out exactly how that thing got going and very hard to figure out how any one could have anticipated how it would have gotten going.  The fear is that if the world gets like this, you push yourself in the direction of -- I think the Harvard word is instability; they use that fancy word; really complicated.  That is what I meant.</P> <P> Danielle Pletka:  There is a gentleman at the back with a question.  Go ahead.  I meant further back, but you are next.</P> <P> Morgan Flom:  Hi, this is Morgan Flom.  This question is for Mr. Crouch.  I just wanted you to comment on the specific threats regarding nuclear terrorism to U.S. national security.</P> <P> Danielle Pletka:  Well-done with that prompt.</P> <P> J.D. Crouch:  Well, I do not think that it is hopeless.  Well, let me start [inaudible].  The conventional wisdom is you cannot deter a nuclear terrorist, and if the definition of that is somebody who is in sort of the last 20 minutes of delivering the weapon to a port or inside a city or the like, there is probably a pretty good argument there.  </P> <P>But I think that we have to think about what it takes for said terrorist who is willing to give up his life to destroy an American city or a European city or whatever -- what it takes for them to get there and to back up all the piece parts that in fact it is a system that, fortunately, terrorists are human; they have to live on the land; they have to breathe air; they have to eat food, and they have to obey the laws of physics.  And if they did not have to do those things, then we would be in real trouble.  </P> <P>So they have to come from somewhere; they have to have support; in fact, there is a whole chain, if you think about it, of how do you get from the idea that I would really like to blow up New York City with a nuclear weapon to actually delivering it.  It involves a lot of people potentially and it can be pretty complicated.</P> <P>So then the question is if that is the case, how can you strengthen deterrence along each one of those links?  Because the canonical wisdom is, well, we have to be right 100 percent of the time and they have to be right only once.  And there is a certain truth to that but at the same time, if you think about the delivery of that weapon as a chain of events, they have to get every chain right.  If we can interdict one chain, one length along the way, we stop the delivery.  And so we have to think about it as a systems engineering problem in a sense.  And we have to think about it -- I think deterrence can be useful in this respect. </P> <P>Examples -- have we really sort of thought through -- I think the Bush administration has started this but the next administration has to pick it up.  What a sophisticated well-messaged and communicated declaratory policy is about.  What happens to you if you are involved in this process?  What happens to your country if your country is involved in this process?  And I am not talking about retaliation, even; that will change, depending upon the nature of the country.  But that we are just beginning to sort of think these things through.  Are there ways, for example, to communicate in Islamic terms the unacceptability of this action?  </P> <P>Again, some of the scholars I have talked to think there is some promise there.  We are probably not the best source; we are not a genuine source for that.  But there may be ways to enhance deterrence literally from the mosque.  Being able to be effective in denying -- you know, denial deterrence is not going to stop the terrorist from wanting to attack you but he may choose other paths that are less catastrophic to you and the international system. </P> <P>So I think those are some of the things we have to think about.  So I think the conventional wisdom is in some ways you that cannot stop a terrorist with a nuclear weapon makes you stop thinking.  And so we really need to think about the unthinkable again in this nuclear terrorist context.</P> <P> Henry Sokolski:  Can I follow up on this just for one second?  Two hands can clap.  You can have -- not only do you have to do these things, which are being discussed and need to be promoted further, but it is quite interesting.  I know that one of the world s leading military realists, Kofi Annan, stumbled into something which actually made sense.  And I think it is important when someone makes sense that you do not normally agree with, you pay attention.  Part of what he s had to say is you do not want to get people into the habit of having a right and exercising it with regard to the materials that would make nuclear terrorism a lot easier.</P> <P> This brings you back to the pointy-headed world of not encouraging people think they have a per se right to get right off the edge in making bombs even if they are losing their shirts and there is no way to safeguard it, even if the rules say explicitly that is not how to read them.  I think this is part of the answer, too; you need a lot of answers to deal with it.  By the way, in general, you may not be able to prevent the inevitable but later is better than sooner and less is better than more.  I think J.D. s comment about preventing concentrations of chaos is a very worthwhile thing to try to shoot for, in general, across the board in almost every endeavor.</P> <P> Danielle Pletka:  Okay, the question right there.  There we go.</P> <P> Michael Gerson:  Thank you.  I am Michael Gerson from the Center for Naval Analyses.  Picking up on the rule-based issue, a lot of the discourse on the NPT often talks about this notion of sort of American hypocrisy; the fact that we cut the nuclear, we cut India deal with nuclear -- you know the U.S.-India deal.  We have not abided by our commitments to disarm.  There is a lot of this contention -- and it has been some of it today that we have to have this set of rules that are across the board.  </P> <P>My question is how much do you really - this is for the whole panel - I mean how much do you really think what we do with our nuclear weapons program, such as the RW things like that or what we do; deals we cut with other states on nuclear energy actually effect proliferation?  It is just hard for me to see how what we do with India or a new war head actually compels a state to make such a dramatic decision economically costly, political costly, potentially exacerbating the security environment.  </P> <P>I mean if anything, the reason other states -- the reason North Korea, you know, wants nuclear weapons is to balance against U.S. conventional capabilities rather than our nuclear capabilities.  It is precisely the same logic that the United States used the threat to use nuclear weapons first to deter Soviet conventional aggression in Europe.  So my question is, really, how much do you really think that what we do -- I mean, that even if they politically justify it that way, is there real causality there? </P> <P> Danielle Pletka:  George and then J.D., please.</P> <P> George Perkovich:  Well, I that is a big question; it is kind of a classic question and I would give the answers at several levels.  You mentioned North Korea and you mentioned that what has driven them in many ways was concern about U.S. power.  What the leader of North Korea has said is that the U.S. is a nuclear weapon state; it has nuclear weapons and nuclear weapons back up every exercise of its military power. And, therefore, it is a nuclear threat, ultimately, that we have to address.  </P> <P>Now that is having it both ways on his part and I think in general now, people are more concerned about our intervention, about U.S. intervention, which, in all likelihood, would be backed by conventional power.  But we cannot then turn around and say we have to have nuclear weapons so we have the freedom to project power wherever we want and then say, Yes, but discount that.  You know, our nuclear weapons are irrelevant.   It seems to me they are inseparable.</P> <P>There is the original chain, which we tend to ignore; in other words, proliferation in Pakistan then had implications in Libya, North Korea and Iran and it was in response to India.  India was partly in response to China, which was in response to us and so on.  So if you kind of work back the chains there is a lot of proliferation that stems, again, from the possession of kind of the established nuclear weapon power; that seems undeniable.  But the point that you are making is I think generally true that there are states that may seek nuclear weapons not in direct response to the U.S. possessing nuclear weapons.  </P> <P>But the concern there is if you want to stop those states or you want to rally the international community to stop them or enforce the rules as we have seen with Iran, you find that the capacity to build that political coalition is different when you are insisting on having your own nuclear weapons and your Congress is debating any given moment whether to develop a new kind of nuclear weapon, and you are going to people whose diplomats do not understand the nicety of these issues and you are saying, We really want you to join with us in sanctioning Iran because what it has done has been illegal and everything else.   </P> <P>And then they rebut, I thought you guys were getting a new nuclear weapon.   Or Israel has nuclear weapons and you do not say anything about that.   And so that set of double standards thus limits your capacity to have a coalition.  And so you imagine flipping it now and saying if you had a country like Iran doing what it is doing and let us say the U.S. and others had no nuclear weapons, do you think it would be a little easier to get international support to really isolate Iran and to sanction it if you did not have that double standard?  I think you probably would.  It is a thought experiment and I do not say it is a practical issue.  But I think, yes, it affects people in Congress.  When you go and testify they say, Well, wait a minute.  Are we not practicing what we preach?   And it just goes against basic human behavior, I think.</P> <P> Danielle Pletka:  I m not going to beat you over the head with a stick, although, I want to.  J.D. you do it.</P> <P> J.D. Crouch:  No, I mean, I think it really depends on -- I look at it from an audience standpoint and it is another way of cutting [indiscernible].  I actually do not think the rogues -- I do not think Iran or North Korea will change their position if we do not build the RRW or if we do not ever develop another nuclear weapon.  I am not even sure that if we completely went to zero that it would have any impact on them because I think they have their own sort of regional aspirations, or in the case of North Korea, I think it s just kind of a hanging on to their hide.  They are like the picture of the cat, you know, hanging in there.</P> <P>So I think the next level of audience is sort of allies and friends and that is why I focused on allies and friends because I really am concerned that, in fact, as we talk about abolition, as we talk about going in the direction of zero, that the lesson that is being heard in places like Tokyo and Ankara is, We can no longer rely on the American nuclear deterrent and we have to find a way to deal with this issue ourselves.   And that, I think, does have the potential to have this sort of cataclysmic chain reaction nonproliferation, certainly, on a regional level.</P> <P>And then I think the third level, which is the most amorphous but I do not completely discount it - and you mentioned it, George - is the international community.  I mean international community is arguably a contradiction in terms; that is to say, there is no community, really, but there is something there that -- the fact that we are not -- it gives people at the very least a talking point, if you will, to be able to go back at us.  </P> <P>But I worry less about that because I actually think that there are so many reasons why countries, for example, do not want to help us sanction Iran that do not have anything to do with nuclear weapons, that have to do with things like, Gee, we would really like to continue to sell things in Iran, or We would really like to get oil from Iran, or whatever the reasons are that I am not sure it is going to give you that much benefit.  But I am not saying it has no value; I am just saying that I would give it reduced value.</P> <P> Daryl Kimball:  Daryl Kimball, Arms Control Association.  J.D., I want to ask you a question about this extended deterrence argument you are making.  Are there not other ways in which the United States could assure our allies such as Turkey and Japan that we will help ensure their future security without maintaining the number of nuclear weapons we maintain today, while pursuing the goal of the elimination globally of the nuclear weapons by all?  I do not quite understand how this talk is going to lead these two countries to make the monumental decision to pursue nuclear weapons.  And I would like George to comment on this, too.  This argument seems to be something we should be talk about, but I just do not see the evidence for this type of assertion.</P> <P> J.D. Crouch:  Okay, I would say the following about it.  One is, absolutely, there are other things you can and should be doing other than having nuclear weapons.  And that is why I distinguished in my talk between assurance, which I think is a broader set of policy options.  And, indeed, if you look at the NPR, they talked about having advanced conventional capabilities, missile defense, other aspects of that.  But there are political aspects of that relationship as well.  </P> <P>So, for example, you know, one of the things we did during the Cold War is we set up something called the Nuclear Planning Group.  Why did we do that?  Did we want to do nuclear planning with the NATO allies?  No.  In fact we did not really do nuclear planning with the NATO allies.  But it was a way of sharing our understanding of deterrence, a way of making them feel more secure in that deterrent relationship on both sides of the coin.  Remember?   </P> <P>In other words, I always used to say that the European allies on Monday, Wednesdays and Fridays were concerned that we would not retaliate with our nuclear weapons if they were attacked.  On Tuesdays, Thursdays and Saturdays, they were concerned that we would retaliate with our nuclear weapon.  So this was a vehicle that Nuclear Planning Group as well as other -- and the deployment of nuclear weapons in Europe, as we maintain to this day, to help reassure those allies.  And so I do not think, necessarily, the tools that were used, for example, in NATO are applicable to Asia.  But I think thinking about how do we assure allies in that respect is really important; a lot of tools.</P> <P>Now, I do think though there is something unique about nuclear weapons.  I do not think that allies who are facing nuclear, chemical, and biological threats will be as convinced that our advanced conventional prowess is enough to deter these states without them having a resort to that.  So I do think there is a unique role but it is probably a diminished role from the Cold War.  And as I said, no, I do not think it gets in the way of being able to reduce force levels which this administration has put us on the track to go down at about 2000.  People are arguing about, well, should it really be 1500 or, you know, 1800 or whatever it is.  Some want to go further.</P> <P>The problem with abolition to me is really the problem of if you ought to get rid of nuclear weapons, how do you then maintain your nuclear enterprise?  Because it seems to me it is very difficult to go up to Congress and say we ought to get rid of our nuclear weapons but at the same time we ought to have new nuclear weapons or we ought to have an infrastructure that allows us to develop those and maintain those until such time as we can.  So I see a fundamental political tension there that reverberates over into places like in Asia.  And I have had conversations with people over there who are watching that debate very seriously.  So I think we need to talk to our allies about it but I think before we step off that ledge, or, maybe, it is just a step, we ought to know where we are landing.</P> <P> George Perkovich:  Yes, I agree with a lot of what J.D. said and, also, the Monday, Wednesday, Friday, Tuesday, Thursday, Saturday thing is very important.  Extended deterrence is a very easy conversation to have today.  It was a much harder conversation to have when it might actually be needed, which was in the 80 s or the Berlin airlift.  I mean that is when they are worried the other way that you are actually going to use these things.  </P> <P>And today it is different, but I think there is a confusion or a clarity that needs to be greater, which is, you know, for example, J.D. said what would we say to allies who are facing MBC threats?  Well, then we have not eliminated our nuclear weapons because no one is talking about unilateral nuclear disarmament.  </P> <P>So the question, it seems to me, about extended deterrence is in a world when no one had nuclear weapons, are you saying that Japan would then, as an example, be the only one to seek nuclear weapons because the U.S. cannot manifest its security assurance and Japan faces such threats that it would then be the only country that would break this arrangement and seek nuclear weapons?  Or Turkey, for example?  </P> <P>Because the predicate of people talking about abolition is that everybody has to do it; it is multi-lateral; that is why it is hard.  And we are working on verification and other issues and I think it is extremely difficult and, in fact, hard to imagine but that would be the predicate.  No one is saying that the Commander-in-Chief or the U.S. Congress would sign off on dismantling our last weapon.  And the same would be true with the French and others if there was not a fairly robust confidence in that kind of regime.  So in that case, are we saying that our allies would also turn out to be the ones in the world who would have to have nuclear weapons and break such a regime?</P> <P> Danielle Pletka:  If you want to answer briefly and Henry wants --</P> <P> J. D. Crouch:  I would say it might, yes.  In other words, if I am sitting in Tokyo, for example, and I am looking at where I am in terms of my demographics and the like and I am looking at China and I am worried about China -- maybe, wrongly worried about China, but I am worried about it.  It is not clear to me that having nuclear weapons would not be -- even if there were no other nuclear weapons in the world, would not be seen as advantageous.  So that was just an example, but I think it might.</P> <P> Henry Sokolski:  Yes, it is very important when you are doing practical policy to promote better behavior like temperance - I get back to that - that you not get too caught up in the thought exercises associated with the elimination of all alcohol.  I think what worries me a little bit about the tenor of these conversations is it has a quality like trying to figure out what the world would be like if Napoleon had an H-bomb or if Japan had this or that.  </P> <P>The more important point, which is very interesting between these two speakers, is that there is a desire somehow to be able to say, Well, it does not prevent us from coming down in numbers.   And I think George also kind of is worried about not doing anything so precipitous that it promotes someone to go nuclear, which suggests to me that an awful lot of what matters has to do with whether you can demonstrate that you care about certain things in a way that convinces your friends, if not your enemies.  And my guess is we do still think we can do that.</P> <P>And that is the reason we have panels like this and that is the reason why we do not kick back and say, Well, you know, what we do does not matter at all.   I think we still are under the faith-based assumption for our policy making that we do matter.  Maybe we are wrong, but that is what people on this panel think.  I say that to the AU students because there is a lot of deconstructionism out there.</P> <P>Danielle Pletka:  Tom?</P> <P> Tom Morrison:  Tom Morrison of Foreign Relations Community.  J.D., to his enduring undiplomatic credit, named names, Turkey and Asia, by which, I think, he meant Japan, and also usefully said that it is not about rogue states; it is about people who are our friends.  So in that vein I would ask what is an effective U.S. response to a Turkey and a Japan with nuclear weapons, particularly in view of the NPT s language on encouraging and assisting, given that everything in those two countries, we will say, is under safeguards and some of it will be technology we exported to them?  </P> <P>It seems to me the impact of that on the other nuclear weapon states might not necessarily be that they want nuclear weapons, too, or that the United States should stop the RRW program.  It might instead be efforts for a roll-back on those two countries because of the real impact of Japan with a nuclear weapon.  The only circumstance or study I ever saw where the NPT actually collapsed was if Japan got a nuclear weapon and the United States did nothing about it.  Well, what should the United States do with the countries that it is allied with, in particular since it seems to be your argument that more of our allies are looking for nuclear weapons and it is not just the rogue states?</P> <P> J.D. Crouch:  Well, you know, obviously the tenor of my point is to try to not get there and that our assurance capabilities, broadly defined, including our nuclear capabilities, play an important role in doing that and it is not just nuclear capabilities, as Daryl pointed out.  So it is very hard in the abstract to say how you should deal with that, I think.  In other words, I do not think there will be a one-size-fits-all and I do think the context will matter.  That is to say, what is going on across the Sea of Japan and how have they done this?  How have they gone about doing this in what manner?  </P> <P>By the way, I do not think this is a highly likely scenario either and I am not suggesting that.  And if I have any Japanese friends left, or Turkish friends, I am not suggesting that I think it is highly likely.  But I do think it is something we ought to be concerned about and that when we talk in our domestic political debate about the directions that we ought to head, we ought to be sensitive to how that conversation reverberates in other places, whether it be Tehran or Beijing or Tokyo or Ankara.</P> <P> So it is not a satisfying answer in the sense that I do not know.  I mean, I cannot tell you exactly what we ought to do.  I think I would be pretty alarmed about it but, again, it would depend a lot on the context.  It has happened before. The other interesting question is to what degree do you want in that environment to have influence over a new program?  The NPT tends to lead you in the direction of wanting to divorce yourself from the program.  </P> <P>With friends and allies, it is different, or could be.  And you might have marginal advantage in having influence over the program.  You might be able to direct it, suppress it, channel it in a non-nuclear direction, eventually.  You know, there are a lot of things that you could conceive of.  So, for example, sanctioning them might not be the step that would help lead you in that direction.  So I do not know.  But it will be very context, I think, specific.</P> <P> Miles Pomper:  I m Miles Pomper from Arms Control Today.  I have a question for J.D.  There seems to be a tension between this idea of providing assurance to allies and your other goal of combating nuclear terrorism in certain respects.  I mean, I m thinking of, for instance, tactical nuclear weapons, which represent a proliferation danger and a question of terrorist access and then an assurance to a country perhaps like Turkey in our relationship.  How do you square those two interests in dealing with these issues?</P> <P> J.D. Crouch:  I do not think it is necessarily so.  I think that is why I mentioned that I m not sure that the Cold War approaches we took which, you know, at least in the case of the Korean mainland and in Europe, we actually forward-deployed tactical and nuclear weapons.  I m not sure in the current circumstances we would want to do that.  I mean, I do not see the real advantage necessarily in doing that.  So I think there are other ways for the nuclear guarantee to be projected that take into account what you are really talking about, which is husbanding whatever nuclear weapons you have got in a way that you are fairly confident in their safety and security.</P> <P>So I think there is, potentially, attention there but I think it can be worked out.  I don t think that it s one that s -- it is not an inconsistent proposition.  But if you fail and you end up with a larger number of nuclear weapon states as a result of failing to assure friends and allies, then I think you actually do multiply the nuclear terrorism problem because you have got more places from which they could extract either the technology or even a full-up [sounds like] weapon. </P> <P> Danielle Pletka:  Do we have anymore questions?  As long as it is quick, seeing as we have a recidivist.</P> <P> Male Voice:  I had a second question.  Regarding the security assurances issue, you are proposing there is a solution to the problem.  The question is giving security assurances is putting U.S. blood, treasure and reputation on the line.  Should security assurances be a tool for nonproliferation if they either do not believe it and then we got to bring the [indiscernible] back or something and forward-deploy nuclear weapons, or we risk getting dragged into a conflict in which nuclear weapons might be used on us or our interests for the sake of making somebody happy or feel safe today?  It is not a simple question of let s just make them feel happy if we might actually get dragged into a nuclear war because of it.  And the question is, is it worth it?</P> <P> J.D. Crouch:  Again, part of my assumptions were the United States needs to stay active in the world and have allies overseas.  So the only way you can do that is by providing some level of security guarantees, which can go both ways.  We have NATO forces in Afghanistan that are helping to support our security right now, so it is not a one-way door.  But, clearly, we are more of a security provider and security exporter than we are an importer.  And that is just, I think, the nature of our size, influence, geographic position and the like.  I do not see -- I know it s a strong word but I don t see an isolationist option for the United States.</P> <P> Male Voice:  Again, I agree with a lot of what J.D. said but I mean it strikes me on the security assurance issue -- and we are putting a lot more in this discussion, which makes sense because it is about nuclear things.  We are putting a lot more value and emphasis on nuclear weapons than, I think, is either real today in the world or desirable.  It is also kind of historical in a way in terms of just how useful these were.  And if you look at the different times when the U.S. moved nuclear forces or [indiscernible] off it almost never was security assurances; it was kind of games we were playing with the Soviets or the Chinese, or Kissinger trying to convince them that Nixon may be insane and things like that.  </P> <P>But, also, the security assurances we are talking about, and J.D. talked about -- we are an exporter of security but a lot of what we are asking our allies to whom we are giving security assurances to do these days is to come along with us on missions in other places where it seems to me the kind of construct we have [inaudible] how do we assure them that nobody is going to invade them?  Right now, our security relations tend to be about things in other places or contests that we have with their neighbors and we are trying to get them to side with us in our contest that is kind of going away from their shores.  I m not saying we should not do that but I m saying it is not kind of the thing we are imagining about the poor guys being invaded if not for our nuclear weapons.</P> <P> Henry Sokolski:  Last word.  Actually, the representative in the back there -- I guess, non-proliferation is a fancy highfalutin word for making sure that our influence is relatively larger than others.  And that we can somehow manage whatever it is we have that we would like to bring down at our own pace.  And if it turns out we can somehow survive as a country without having friends abroad, then we do not have to worry about any of this.  But, last I checked, that is not the way the world works.  We are - and I recommend this to all the AU students - a nation that relies on access to markets as far as the navy, and air force, allies and security assurances that is not going to change; I hope.  On that upbeat note, think well of nonproliferation.</P> <P> Danielle Pletka:  If I may thank our panelists, many of whom are still here, especially on our last panel today; all our audience for coming for a most interesting day; and especially Henry Sokolski and the staff of the Nonproliferation Policy Education Center and all my colleagues at AEI.  Thank you very much for being here today.</P> <P>[End of file]</P> <P>[End of transcript]</P></body></html>