Questionable China-Pakistan deal draws little comment from U.S.

By Glenn Kessler
Washington Post Staff Writer
Thursday, May 20, 2010

Diplomacy sometimes consists of winks and nods, not outright trades. That might explain why the Obama administration has been quiet about a recent Chinese commercial transaction that nuclear specialists say marks a blatant disregard of international guidelines.

In the midst of intense negotiations on new sanctions for Iran, which China was reluctant to embrace, Beijing confirmed that one of its state companies had signed an agreement to supply Pakistan with two new nuclear reactors.

The lucrative deal, if consummated, appears to be a clear violation of international guidelines forbidding nuclear exports to countries that have not signed onto the nuclear Non-Proliferation Treaty or do not have international safeguards on reactors. China agreed to the restrictions in 2004 when it joined the organization that monitors such transfers, the 46-nation Nuclear Suppliers Group.

President Obama has strongly advocated for restrictions on the spread of nuclear technology. But his administration has said little publicly about the China-Pakistan deal. Meanwhile, the administration announced Tuesday that China, despite its misgivings, had signed on to a draft U.N. Security Council resolution sanctioning Iran.

U.S. officials said there's no connection between the two developments, but some analysts see the potential for a quid pro quo.

Before the announcement, Mark Hibbs, a nuclear specialist at the Carnegie Endowment for International Peace, wrote an analysis on the issue in which he said that members of the Nuclear Suppliers Group "expect that the Obama administration will accept a limited amount of additional Chinese nuclear commerce with Pakistan as a price for getting Chinese support on U.N. Security Council sanctions against Iran in weeks ahead."

China suggests the sale is grandfathered from before it joined the NSG, because it was completing work on two earlier reactors for Pakistan at the time. "China and Pakistan conduct civilian nuclear cooperation fully in compliance with the two countries' respective international obligations," said Chinese Embassy spokesman Wang Baodong. "The cooperation is transparent, only for peaceful purpose and subject to IAEA [International Atomic Energy Agency] supervision."

Few outside experts agree. For its part, the administration says its position on the reactor sale is still under review.

"This is something that is still under discussion among all of us," Deputy Secretary of State James B. Steinberg said last week. "Obviously it's important from our perspective that all countries live up to their commitments." He said the question of whether the sale could be considered grandfathered is "something that we haven't, I think, reached a final conclusion on."

A senior administration official, speaking on the condition of anonymity to talk more freely, said the United States is waiting for China to detail how it plans to proceed with this transaction. "We don't have much clarity, and so the issue has not ripened in the government," he said. He said any claim that the reactors are grandfathered "would be a hard case to make," but China could seek a formal exemption from the guidelines -- which are voluntary in any case.

Indeed, complicating matters is that the United States, after hard lobbying, in 2008 won a specific exemption at the NSG for trade with India, Pakistan's nuclear-armed rival. Pakistan has long wanted its own exemption -- and the United States has refused -- but the administration may not want to roil relations with Islamabad at a time when their partnership on counterterrorism is seen as crucial.

Hibbs said in an interview Wednesday that the administration faces two unappealing options -- either move to make life difficult for China at the NSG for failing to abide by the guidelines, or bite the bullet and let the sale go forward. "My understanding is that it is more likely that option 2 is what they will choose," he said.

The NSG will soon hold a plenary meeting, chaired by New Zealand, a tough proponent of maintaining nuclear rules, and Hibbs said that other countries are waiting for the Obama administration "to show leadership on how to deal with this issue." He said that "if the United States chooses to say nothing, then the question arises whether anyone else would object."

Daryl G. Kimball, executive director of the Arms Control Association, said the China-Pakistan deal "is some of the fallout of the India-U.S. civil nuclear agreement" -- which included the special exemption for nuclear trade. The deal was a Bush administration initiative -- but was avidly supported by then-Sens. Barack Obama, Joseph R. Biden Jr. and Hillary Rodham Clinton.

© 2010 The Washington Post Company