China, Pakistan, and the Nuclear Suppliers Group
Mark Hibbs
Q&A, JUNE 17, 2010
The possibility that China will export two nuclear power reactors to Pakistan looms over the annual meeting of the Nuclear Suppliers Group—a 46-nation body that sets global rules for nuclear trade—scheduled to begin next week in New Zealand.
In a Q&A, Mark Hibbs analyzes the importance of the meeting and significance of the China–Pakistan deal. Hibbs says that “in the aftermath of the 2008 U.S.–India deal and the NSG’s decision to allow it, the NSG will have to perform a delicate balancing act to find the least unsatisfactory solution to meet China’s challenge.” ………………….
China wants to export reactors to Pakistan. Is this a violation of NSG guidelines? Will this issue be on the agenda for the NSG meeting?
This is not on the agenda. But China, which joined the NSG in 2004, is now expected to make a statement about the matter in New Zealand. China might disclose its intentions during the plenary meeting on the last two days, when NSG members plan to discuss their activities with non-NPT countries.
If China aims to export the reactors, Beijing has three options: to follow the example of the U.S.–India deal and formally request an exemption from the NSG guidelines for its trade with Pakistan; to claim that the export of the reactors is “grandfathered” by a pre-2004 Sino-Pakistan nuclear cooperation agreement; or to exercise its sovereign right and ignore the guidelines, which are voluntary and non-binding. According to diplomats, as of mid-June, Beijing had not yet decided which of the three options it would choose.
China might argue that the exports could be justified by the need for regional balance in South Asia in the aftermath of the NSG’s lifting of sanctions against India. But some in Beijing may instead assert that the commerce was grandfathered by the bilateral pact with Pakistan, thereby obviating any political justification by China for making an exception to the NSG rules.
However, when China joined the NSG it told the group that the Sino-Pakistan nuclear cooperation agreement permitted China to export the Chashma-2 reactor to Pakistan, small research reactors, and the fuel for these units. On the basis of previous Chinese statements, the United States will come to the meeting in New Zealand understanding that the supply of additional power reactors would not be grandfathered.
The United States is not in favor of such a deal, but because Washington pressed the NSG—and China—to exempt India from NSG trade sanctions in 2008, it is now more difficult to complain about China’s desire to export reactors to Pakistan.
Will we see resolution on the China-Pakistan deal in New Zealand?
If China spells out that it intends to export the reactors, it will then be up to the NSG’s members to decide whether they will accept this, and if so, on what terms. A quick decision appears unlikely as NSG members on the eve of the meeting did not agree on how the body should respond.
This week, a spokesman for the U.S. State Department told reporters that China should request a formal exemption from the guidelines to export the reactors. Some other NSG states, however, disagree and fear that this route could lead to a protracted debate over whether the NSG should dilute the guidelines to accommodate China. A request for an exemption by China could also expose individual NSG states to pressure from China to get the exemption and if China failed, it could threaten to leave the NSG.
In the aftermath of the U.S.–India deal and the group’s decision to accommodate it, the NSG will have to perform a delicate balancing act to find the least unsatisfactory solution to China’s challenge. In the view of some NSG states, an agreement permitting China to grandfather the exports under the 2004 nuclear cooperation agreement with Pakistan would be the least damaging outcome, but it may not be credible. If China seeks an exemption, NSG countries could urge Beijing to provide nuclear security and non-proliferation benefits in exchange for limited commerce with Pakistan.
But NSG members must weigh the risks carefully. Pushing Beijing out of the NSG would be dangerous given China’s fast-growing share of global nuclear trade. Beijing may ignore objections of other NSG states and it might even react to a rebuke by threatening to leave the NSG. NSG states, however, have leverage over China in nuclear matters as Beijing knows that it needs to import uranium from Australia, Canada, and Kazakhstan to keep expanding its nuclear power program. It also needs support from vendors in France, Japan, Russia, South Korea, and the United States to keep building and exporting reactors.
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This infuriated Pakistan, which pointed out that it would help India to secure an even greater military advantage....