Background Briefing on Nuclear Cooperation (Excerpts)

October 29, 1997

SENIOR ADMINISTRATION OFFICIAL: Let me start with a few remarks. The President, in his press conference statement, mentioned that on the basis of steps the Chinese have taken and assurances they have provided, he will submit to the U.S. Congress the certifications necessary to, under U.S. law, to implement the U.S.-China agreement for peaceful nuclear cooperation. Let me just start off by mentioningsome of these steps, mentioning some of these assurances.

Now, we've been negotiating with the Chinese for over two years now on whether we can find an adequate basis for meeting the requirements of our law, and we believe, after about two years of very intensive work, we have met these requirements. In the course of this period, we have seen a marked positive shift in China's nuclear nonproliferation behavior, both in terms of new commitments as well as actual behavior.And let me go through a short list.

In May 1996, China committed not to provide assistance to -- (inaudible) -- Pakistan or anywhere else. We have monitored this pledge very carefully over the course of the last 16, 18 months, and the Chinese appear to be taking their pledge very seriously. We have no basis to conclude that they have acted inconsistently with this May1996 commitment.

Also, the Chinese have provided assurances with respect to nuclear cooperation with Iran. What they have assured us is that they would not engage -- that they are not going to engage in new nuclear cooperation with Iran, and that they will complete a few existing projects, and these are projects which are not of proliferation concern. They were complete them within a relatively short period oftime.

And in the course of our discussions with the Chinese and even before that, they've taken steps to suspend or cancel certain areas of cooperation that could have been of real proliferation concern. And there are indications that they've turned down the Iranians in a number of their requests in the nuclear field when they judged them tobe of proliferation concern.

Another element is the adoption of comprehensive nationwide nuclear- related export controls. The Chinese did not have such a comprehensive system in the past, and this is one of the problems. They have, in the last several months, taken very significant steps to put in place a comprehensive regime to control nuclear-related equipment, technology, personnel exchanges. They've done this through a number of state council directives beginning in May and continuing through September, and they're continuing to work on and improve theirregulatory structure.

Another important step is to join multilateral export control discussions. The Chinese had never before participated in any of these multilateral export control regimes, but they decided recently to join the so-called "Zangger Committee." That's the NPT exporters committee. It's a group of nuclear supplier states, all NPT parties, and they discuss how to control nuclear related exports in a responsible way. China has now joined that body -- it's a verypositive stay.

This, in addition to a number of other steps, and Secretary Albright mentioned some of them -- they joined the NPT in '92, they supported its indefinite extension in '95, they stopped nuclear testing and signed the Comprehensive Test Ban Treaty in '96. They support a fissile material cut-off treaty. They supported the effort to strengthen the safeguard system of the International Atomic Energy Agency. So there are a range of steps in the nuclear nonproliferation area we have considered quite positive and they meet, in our view, the requirements of our law and that's why the President has proceeded toannounce that he will submit the necessary certifications.

Q: Regarding Iran, are they in writing -- maybe you said it before, but are they in writing or was it just verbal commitments?

SENIOR ADMINISTRATION OFFICIAL: Let me mention, because we are on background, that the assurances we received are, as the President said, sufficiently specific and clear to meet the requirements of our law and to advance our national security interests, and they are inthe form of writing. They're written, confidential communications.

. . .

Q: You know the critics in Congress are going to point out that this allows the Chinese to tell the third parties something else, and tell us a different thing.

SENIOR ADMINISTRATION OFFICIAL: What we care about is results. We care about the Chinese not providing any new nuclear cooperation with Iran, even under IAEA safeguards. This is a very significant step forward in our efforts to try to prevent the Iranians from acquiring a basic nuclear capability.

. . .

Q: Could you say more about the other types of proliferation that we were concerned about that sort of figured on the margins of this negotiation or as part of the negotiation, but not so straightforwardly a part of the quid pro quo. What progress did you make exactly? And then, secondly, could you explain why there was a decision to elevate this issue about nuclear cooperation with Iran above all other issues that might have been used as part of the bargaining leverage in exchange for letting them have the nuclear technology that they're going to get? We could have attached conditions on human rights. I mean, it could have been the gamut, but you decided to restrict it fairly narrowly to this subject and not to others. So if you could explain that, too, I'd appreciate it.

SENIOR ADMINISTRATION OFFICIAL: On the question of the non-nuclear, the law is very clear. There are laws from 1985, laws from 1990. They set certain conditions for implementing this peaceful nuclear cooperation agreement, and the conditions have to do with China's record in the area of nuclear nonproliferation. That's why I dwell on the steps that China has taken. Those steps, those changes in behavior are what led the President to go forward with certification. Now, we are also concerned about various aspects of Chinese behavior in the non- nuclear area -- in the area of chemical-related trade. Many of you know that we imposed trade sanctions on Chinese entities, seven of them, back in May for assisting Iran's chemical weapons program. We have also pursued very actively the question of missile technology transfers to a number of countries with the Chinese. These are a very high concern of ours, a preoccupation in all of our discussions with the Chinese and at the highest levels. But in our view it's not appropriate to link these other issues with the nuclear certification, because the nuclear certification requires performance on nuclear issues, and to pile a number of other conditions on top of that would be to move the goalpost. And what we do is we -- it would create the risk of not being able to lock in the very substantial progress we would have. And, by the way, as my colleague mentioned, this arrangements will give us continuing leverage on China, a continuing ability to engage with them and influence their program. Why? Because the agreement for cooperation, this 1985 agreement, makes China eligible to receive U.S. nuclear technology, materials, and equipment. All individual transactions have to be licensed on a case-by- case basis. And the Chinese know very well that if they act in a manner that it's inconsistent with their assurances to us, then it's within our rights to terminate nuclear trade. The Chinese know this. So engagement with them will provide continuing incentives for good behavior and for us to improve the record even on chemical and missile issues.

. . .

Q: You've been negotiating this for a while with them; the negotiations have been difficult. I know they were very reluctant to specifically mention the name "Iran" in the agreement that they gave you. What was it that you think finally convinced them to give you the agreement you wanted?

SENIOR ADMINISTRATION OFFICIAL: This is, of course, speculation, because we don't know for sure. First of all, I think my colleague and I have been able to persuade the Chinese that it really is dangerous for them to provide nuclear assistance to Iran. I do not think the Chinese have any political or strategic interest in inadvertently helping Iran to acquire nuclear weapons. I think the Chinese decided partly on the basis of our diplomacy, partly perhaps on the basis of their own information and calculation that the Iranians in the nuclear area really have to be treated very carefully. And I think that the Chinese have decided to act on the basis of that calculation. Secondly, I think that we made it very clear to the Chinese that in order to proceed with the certification and their desire to get useful -- to get peaceful nuclear technology from the United States, which they clearly think is very desirable, they had to meet the requirements that the President set; and one of those was to provide clear assurances on Iran.

SENIOR ADMINISTRATION OFFICIAL: Let me just say on that, very interesting -- this was several weeks ago when a this was several week ago when a senior Chinese visitor came to town. The President made very clear to him that this was an essential requirement; we needed to have this assurance on Iran, or there could be no certification. He made it crystal clear, and I think the President, the strength of his statement on that was the key factor. I think they recognized that they could either have nuclear cooperation with us or with Iran, and they decided that they preferred -

. . .

Q: Could you describe the two projects that the United States is allowing China to complete with Iran? And why is there no concern about proliferation?

SENIOR ADMINISTRATION OFFICIAL: Sure, I can do that. The first project is called a "Zero Power Reactor." And as the name suggests, it's a research instrument that doesn't have any power, so it doesn't present a proliferation concern; it can't produce any significant amount of plutonium. The Chinese have been working on that project for several years. It is essentially completed. They're now just doing the final checkout, and the Chinese have told us that they expect that project to be finished, as far as they're concerned, by the end of this year. So that's something that is virtually at the point of being completed. The second project is called a "Zirconium Tube Factory." And zirconium is used as cladding for nuclear power reactor fuel. Of course, the Iranians don't have any nuclear power reactors, and they may never have any, but this is part of their ambitious hope that they will eventually be able to develop the industrial infrastructure to build and support nuclear power -

Q: Why is it considered a restricted dual-use item?

SENIOR ADMINISTRATION OFFICIAL: Because it has a nuclear use.

Q: But it's only civilian nuclear use, right?

SENIOR ADMINISTRATION OFFICIAL: Technically, you can use it as cladding for any kind of reactor. You could technically use it as cladding for a research reactor. It's not typically done because it's sort of overdesigned for that purpose. Normally, for research reactors, you would use a different type of cladding.

Q: But it's -- still, it's in the civilian area that it has -- all this application in the civilian area -- the question is, why is it restricted as a dual-use item if it has no proliferation restriction, no direct proliferation restriction implication at all?

SENIOR ADMINISTRATION OFFICIAL: Keep in mind that all of the items that are covered by the Zangger Committee are -- they cover civilian, they cover nuclear power reactors.

SENIOR ADMINISTRATION OFFICIAL: Could be civilian nuclear or non- nuclear.

MCCURRY: -- plant was a civilian research reactor, too.

. . .

Q: You mentioned that you were able to convince the Chinese that it would be dangerous to supply nuclear technology to Iran. Why would it be dangerous for the Chinese to do this? I mean, Iran and China seem to cooperate on a number of issues.

SENIOR ADMINISTRATION OFFICIAL: I don't think China has any interest in seeing Iran armed with nuclear weapons. I'm very convinced of that. I do not believe the Chinese -- as a general matter, I think the Chinese have over a period of time, 10 years or more, the Chinese have come to accept that nuclear proliferation is not in their interest. They do not wish to see nuclear weapons spread around the world; certainly not in their part of the world.

. . .