U.S. says nuclear states nearing deal on India trade

Posted 09 12 2008 4:58AM

VIENNA (Reuters) - The United States said on Thursday nuclear supplier nations were making progress towards agreement on lifting a ban on trade with India, after Washington revised a proposal for the move to meet a raft of objections.

U.S. officials, scrambling to finalize a U.S.-India atomic energy deal, have been lobbying others in the 45-nation Nuclear Suppliers Group for a one-time waiver to its rules against doing business with states outside the Non-Proliferation Treaty.

Ahead of a two-day NSG meeting that began on Thursday, some members said changes made to the U.S. waiver draft were cosmetic and did not allay concerns the deal could subvert treaties meant to stop the production or testing of nuclear weapons.

In a sign of its desire to save a major Bush administration initiative, Washington sent its No. 3 diplomat, Undersecretary of State for Political Affairs William Burns, to Vienna to head the U.S. NSG delegation.

"We are making steady progress in this process and will continue to make progress," he said outside the closed meeting.

"And while a number of representatives here have raised important questions that need to be addressed, our discussions have been constructive and clearly aimed at reaching an early consensus," Burns told reporters. He took no questions.

Two diplomats in the meeting said a six-nation bloc that had spearheaded demands for explicit conditions on trade with India was splintering and other significant nations that had expressed reservations, such as Japan and Canada, had now dropped them.

But another diplomat said the "like-minded" bloc of Ireland, Switzerland, Austria, New Zealand, Norway and the Netherlands was holding firm, with backing from China.

CLOCK TICKING ON DEAL

With the outcome still unclear and likely to require consultations in capitals for a final decision, diplomats said another meeting might have to be held later this month.

Without NSG action in early September, the U.S. Congress may run out of time to ratify the deal before it adjourns at the end of the month for autumn elections, leaving the matter to an uncertain fate under a new president.

India has ruled out major conditions on an NSG exemption in order to protect its strategic nuclear sovereignty.

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

Critics fear India could use access to nuclear markets abroad to boost its atomic bomb program and drive nuclear rival and fellow NPT outsider Pakistan into an arms race.

To forestall this, they demanded clauses specifying no trade in the event of another nuclear test explosion, no transfers of fuel-enrichment technology that could be replicated for bomb-making, and periodic reviews of the waiver.

Some diplomats said U.S. insertions into the revised waiver text suggesting, though not spelling out, that trade with India would be cut off if it tested another nuclear weapon had swayed most hold-outs in the secretive nuclear cartel.

The changes also indicated India was "voluntarily committed" to NSG guidelines against exporting "dual use" enrichment equipment that can yield peaceful nuclear energy or bomb fuel.

(Additional reporting by Krittivas Mukherjee in New Delhi; Editing by Giles Elgood)