On February 11, 2004, during a speech at the National Defense University, President George W. Bush announced a set of new measures to prevent the spread of weapons of mass destruction. The president offered the following proposals: 1) expanding the Proliferation Security Initiative; 2) strengthening , the laws and international controls that govern proliferation by all nations; 3) increasing support for the Nunn-Lugar legislation; 4) creating a special committee within the International Atomic Energy Agency (IAEA) to focus solely on safeguards verification; 5) making any country under investigation of violating nonproliferation commitments ineligible to serve on the IAEA Board of Governors; 6) allowing only those states that currently possess full-scale, functioning enrichment and reprocessing plants to receive enrichment and reprocessing equipment from the Nuclear Suppliers Group (NSG); and finally, 7) making the Additional Protocol to the IAEA safeguards agreement a condition of supply for all nations looking to import equipment for their civilian nuclear programs. While most of these proposals were lauded by many both in the United States and in the international community, the Bush administration will likely face significant challenges to implementing policies that prohibit countries from developing enrichment and reprocessing capabilities and conditions the supply of nuclear technology on the ratification of the Additional Protocol.
Two of the proposals--prohibiting countries from developing full nuclear fuel-cycle capabilities and making the Additional Protocol a condition of supply--have enjoyed bipartisan support from members of both Congress and the Senate. A hearing was held in May 2004 by the House of Representatives to discuss the threat posed by Iran's development of a full nuclear fuel cycle. Several members of Congress expressed concern regarding Iran's ability to threaten U.S. interests with a limited nuclear arsenal. The Bush proposals were mentioned as a possible solution to combating this threat. Members of Congress believed that preventing Iran from developing the means to produce nuclear weapons represented the most effective way to protect the United States from a potentially nuclear-armed Iran. More support for the proposals was heard during the Senate hearing concerning the ratification of the Additional Protocol, which the United States ratified March 31, 2004. Members of the Senate suggested that U.S. adoption of the protocol could encourage other states to end their nuclear programs.
Although these two proposals have received strong political support from member of Congress, it is difficult to determine what effect the proposals will have on the U.S. civilian nuclear industry. The nuclear industry, along with various associate industries serving as subcontractors, may find their ability to supply nuclear technology to the international community constrained if these proposals are implemented. However, there are companies that stand to benefit from President Bush's pledge to supply nations that give up their enrichment and reprocessing capabilities with access to nuclear fuel at a reasonable cost. For example, Framatome ANP, a U.S. company globally recognized as a leader in the supply of nuclear technology, recently concluded a contract with Electrobras Termonuclear. The company agreed to provide the Brazilian entity technical assistance for the development of new steam generators for its Angra 1 pressurized water reactor. Had the Bush proposals been in place, Framatome ANP, a joint subsidiary of both Siemens and AREVA, a French nuclear energy company, may have been prohibited from concluding the contract with the Brazilian company worth an estimated 44 million euros ($54,991,200, as of October 19, 2004). Brazil has not signed the Additional Protocol and is one country that members of the Senate would like to see renounce its enrichment and reprocessing capabilities. However, any profit Framatome ANP may have to forgo may be offset by supplying the world with nuclear fuel. The company has the potential to be a U.S. subcontractor for the development of nuclear fuel rods for countries that decide to honor the president's proposal of giving up enrichment and reprocessing capabilities. Westinghouse, a recognized worldwide supplier of nuclear technology, also stands to benefit from President Bush's pledge to supply nuclear fuel. Westinghouse provides services for fuel manufacturing and spent fuel management, and it has developed technology that allows it to supply customers with mixed oxide (MOX) fuel at competitive prices.
Support for prohibiting countries from developing full nuclear fuel-cycle capabilities and making the Additional Protocol a condition of supply is likely to receive support from both domestic political elites and member of the U.S. civilian nuclear industry despite the aforementioned implications of enacting such policies. Business interests in the nuclear industry and representative in both the Congress and Senate are unlikely to criticize the proposals because they want to appear committed to taking actions which combat the spread of weapons of mass destruction. However, President Bush should not expect the same level of support for these proposals from the international community.
The Bush administration is already facing considerable international opposition to policies that prohibit the supply of nuclear technology to countries that have not ratified the Additional Protocol. At the NSG plenary meeting in May 2004, the group stopped short of implementing President Bush's proposals. Members of the NSG considered only conditions of supply for nuclear and dual-use items on the group's control lists and suspension of the supply of nuclear items following a state's noncompliance--as deemed by the IAEA Board of Governors--with its Non-Proliferation Treaty (NPT) or safeguards obligations. Members of the NSG that have either not signed or not ratified the Additional Protocol are Argentina, Belarus, Brazil, Estonia, Russia, and Ukraine. It seems unlikely that countries who have already agreed to limit the supply of nuclear technology will agree to policies that not only constrain their market, but also limit their access to nuclear technologies. Naturally, the aforementioned countries have expressed serious concerns vis-à-vis the Additional Protocol. Brazil, which sees itself as a supplier of nuclear technology to the developing world, argues that it has the right to protect its industrial secrets in a manner similar to that of the United States. However, it is worth noting that Brazil has agreed to enter into negotiations with the IAEA regarding the Additional Protocol, though to date, no agreement has been reached. Other countries such as Argentina and Belarus have also withheld ratification for similar reasons. There are other members of the NSG who are unlikely to support conditioning the supply of nuclear technology on the ratification of the Additional Protocol--those members that already supply nuclear materials and technical assistance to countries that have not ratified the Additional Protocol. For example, in 1996, Korea and Vietnam signed an agreement on the peaceful use of nuclear energy. In that same year, Argentina agreed to construct a nuclear reactor with enrichment and reprocessing capabilities for Egypt. Other countries have followed suit: China, which supplied Algeria with a reactor in 1998 and other materials for a heavy water facility and uranium fuel and Canada, which entered into a technology transfer agreement with Argentina and Australia, signed a nuclear cooperation agreement with Indonesia. While these agreements can be grandfathered into each country's Additional Protocol agreement, the Bush proposals do not address future projects.
Many NPT state parties, particularly those from the Non-Aligned Movement (NAM), have already stated their opposition to President Bush's proposals. In their view, precluding states from developing enrichment and reprocessing capabilities contradicts an important tenet of the NPT-that is, the deal made by the nuclear weapon states (NWS) to the non-nuclear weapon states (NNWS). Article IV of the NPT states that NNWS have the inalienable right to develop research, production, and use of nuclear energy for peaceful purposes, a right intended to provide an incentive for NNWS to give up the pursuit of nuclear weapons. The Bush proposals, however, introduce another element into the nonproliferation regime by segmenting countries into those that can engage in enrichment and reprocessing and those that cannot. Since most states with fuel cycle capabilities are from the developed world, it is clear that the target group of the proposal is the developing world. Prohibiting nations that do not currently possess full nuclear fuel-cycle capabilities from building them could have a disproportionate impact on the developing world. Opposition from these countries has already been expressed and is likely to increase as they become forced to import fuel for their nuclear reactors. The Bush proposals do not outline a comprehensive plan for supplying such fuel. Offering only a vague reference to fuel at a reasonable cost--President Bush, in his address, called on "leading nuclear exporters" to ensure that states have reliable access to fuel at reasonable cost--the proposals do not make clear how the administration intends to ensure that costs remain reasonable while world uranium prices are on the rise.   As populations grow in countries such as Algeria, Indonesia, Nigeria, and Vietnam, electricity demand in these countries will grow as well. While these countries could meet future energy demands with oil reserves, the global call to cut fossil fuel emissions makes employing this option politically unpopular. Furthermore, under the Bush proposals, these countries would find limited ability to satisfy their energy needs, and meet global emissions standards, through the development of a commercial nuclear energy program. Aside from sending a message to the developing world that it is incapable of engaging in responsible nuclear stewardship, adoption of the proposals would require these countries to import nuclear fuel from NSG members, an organization already perceived by some as having cartel-like control of the supply of nuclear technologies. The developing world is therefore likely to view any policy that leaves them dependent on the developed world with skepticism and a concern that the supply of nuclear fuel will be employed as a tool of foreign policy.
The proposals are also unclear about how developing nations such as Argentina, Belarus, Brazil, Kazakhstan, South Africa, and Ukraine--all countries that possess full nuclear fuel-cycle capabilities--will be affected. These countries have been identified by the United States as nations that should be encouraged to give up their enrichment and reprocessing capabilities. and President Bush's pledge to ensure that states have reliable access to fuel at reasonable cost was intended to provide an incentive for these nations to do just that. However, the aforementioned countries are all either currently engaged in nuclear fuel fabrication or have the technology to do so. For example, Argentina operates a heavy water reactor fuel fabrication plant, Brazil operates a uranium hexafluoride conversion facility and a light water reactor fuel fabrication facility, and Kazakhstan operates a light water reactor fuel fabrication plant. These countries are unlikely to give up their enrichment and reprocessing capabilities when they all joined the NPT because of its stipulation that, in exchange for agreeing not to develop a nuclear weapons program, they would have access to nuclear technology and technical assistance for civilian nuclear programs. The United States is now leading the charge to limit this access by arguing that Article IV is a loophole that has lead to, in the words of Under Secretary of State John Bolton, a "crisis of noncompliance." Future plans to prohibit countries from continuing to explore nuclear fuel fabrication may have the reverse effect of prompting countries close to developing these capabilities to stall on ratifying the Additional Protocol.
Rather than unilaterally treating the non-nuclear weapon states as one group, with many nations bearing the burden of limited access to nuclear technology because of the actions of a few, the NSG should develop policy alternatives which address the development of nuclear weapons programs in coordination with the NAM at the next plenary session. An alternative set of policy options could be developed for those NNWS interested in developing nuclear energy programs to meet future electricity demand. The following potential methods for combating the spread of WMD could be considered in paving the way for allowing responsible NNWS to develop indigenous nuclear energy programs without concerns these programs are being used to develop nuclear weapons:
- Implement the proposal offered by IAEA Director-General ElBaradei. The ElBaradei proposal--introduced to limit the WMD threat posed by non-state actors--calls for limiting the processing of weapons-usable material in civilian nuclear programs by restricting these operations exclusively to facilities under multinational control. This option may be more attractive than prohibiting all NNWS from developing energy programs, because preserving access to nuclear technology for all nations that meet their IAEA obligations can be a nondiscriminatory way of combating WMD proliferation. However, before this recommendation can be implemented, greater clarity is needed on who would control these facilities, who would have access to them, and under what conditions access would be granted.
- Encourage NSG members and their clients to agree to arrange bilateral inspection and verification protocols for materials purchased only from members of the group. Rather than restricting the flow of nuclear technologies, this option allows the supplier to account for all materials it provides and to inspect the manner in which they are employed. This task could be performed without revealing the industrial secrets of the client, with the support of the IAEA. Should the IAEA discover that the client is diverting uranium with materials provided by the supplier, the agency should hold both nations responsible. This option could be modeled after the Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials. In July 1991, Argentina and Brazil signed a bilateral agreement to allow mutual inspections of nuclear installations. This confidence-building measure, facilitated by the IAEA, allowed the agency to establish a mechanism by which Argentina and Brazil could exchange information on nuclear material inventories and establish mutual inspection protocols.
- Link irreversible disarmament objectives to nonproliferation objectives by supplying MOX fuel to countries that are prohibited from engaging in uranium enrichment and reprocessing. This option incorporates the German proposal, made at the 2004 session of the Prepcom for the 2005 NPT Revcom, to link Article IV restrictions with far-reaching nuclear disarmament measures by NWS. NWS could pledge to take nuclear weapons off active status and blend down the excess stocks of HEU into MOX fuel. For example, the United States and Russia could blend down HEU from tactical nuclear weapons removed under the Presidential Initiatives of 1991-92. The resulting MOX fuel could be used to supply states with nuclear reactor fuel at a reduced rate. By implementing this proposal, NWS can demonstrate that they are serious about honoring their Article VI commitments and may convince states with full nuclear fuel cycles to give up those capabilities.
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