Nuclear states mull U.S.-India deal again, clock ticks

Posted 09 5 2008 2:35AM

VIENNA (Reuters) - Forty-five nations meet on Thursday to try to bridge differences over a move to lift a ban on nuclear trade with India, needed to seal a U.S.-Indian atomic deal but seen by some as a threat to non-proliferation.

Washington has lobbied others in the Nuclear Suppliers Group for an exemption to its rules to allow exports to India, which has not signed the Non-Proliferation Treaty (NPT), has tested nuclear bombs and refused to rule out doing so again.

But a revised U.S. waiver draft circulated ahead of the meeting glossed over demands for conditions on such an unprecedented concession raised at a two-day session last month, diplomats from concerned countries said.

Barring U.S.-Indian openness to more than "cosmetic" revisions to minimise damage to the NPT, they said, the second two-day conclave could again end inconclusively, shunting the bilateral deal towards the verge of indefinite limbo.

Without NSG action in early September, the U.S. Congress may run out of time for final ratification of the accord before it adjourns at the end of the month for autumn elections.

"The U.S. will not achieve consensus approval for a text presented on a take-it-or-leave-it basis, and it will certainly not achieve consensus on the text currently on the table," said one diplomat, who like others asked for anonymity as NSG deliberations are confidential and politically delicate.

"The U.S. (may) finally have to enter into real negotiations with countries who put forward amendments, rather than negotiate exclusively with India as it has done up to now," he said.

"We will have to find a way in between (the red lines) of India and concerned states. I'd be surprised if we can do this by Friday," said another diplomat.

Some spoke of needing another meeting well into September.

SENIOR U.S. DIPLOMAT CALLED IN

In a sign of the growing urgency for Washington to salvage a major Bush administration initiative, its No. 3 diplomat, Undersecretary of State for Political Affairs William Burns, will head the U.S. delegation to the NSG gathering in Vienna.

Washington and some allies assert the U.S.-India deal will move the world's largest democracy toward the non-proliferation mainstream and fight global warming by furthering the use of low-polluting nuclear energy in developing economies.

Sceptics note India has signed no treaties meant to stop the spread of nuclear weapons, phase out stockpiles and ban testing.

They say the point of seeking conditions for a waiver is to ensure Indian access to nuclear material and technology markets does not indirectly boost its atomic bomb programme.

Conditions aired include a trade halt if India tests a bomb again, no transfers of fuel-enrichment technology that could be replicated for bomb making and periodic reviews of the waiver.

Calls for waiver terms have been made by six smaller NSG states and enjoy some support from 15 more. India has ruled out conditions it says would infringe on its nuclear sovereignty.

Big nuclear export powers have generally backed the potentially lucrative opening to India. But some diplomats said hitherto non-committal China appeared to be coming off the fence on the side of the deal's critics, rattling New Delhi.

A commentary in China's official Communist Party newspaper said on Monday the deal dealt "a major blow" to the NPT and the world was sceptical about U.S. non-proliferation principles.

Asked about this, the Chinese foreign ministry said the NSG needed to act cautiously by striking "a balance between non-proliferation and peaceful use of energy".

"This will encourage smaller NSG members that are opposing the deal," a dismayed Indian foreign ministry official said.

(additional reporting by Bappa Majumdar in New Delhi and Chris Buckley in Beijing)