Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

127. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford¹

Washington, February 14, 1976.

SUBJECT

• Nuclear Negotiations with Brazil

State has forwarded an interagency study regarding steps to be taken in our nuclear negotiations with Brazil (Tab B). Our nuclear cooperation with Brazil to date, carried out under an earlier limited agreement, involved the sale of one power reactor, several research reactors, and the associated fuel. A new agreement is required for the pending purchase of the fuel for two German-built reactors and any possible future sales of U.S. reactors and fuel.

The study contains an analysis of the constraints that we would expect to require in a new agreement to give maximum assurance against the possible use of U.S. equipment, special nuclear material, or technology in any nuclear explosive development that might be contemplated by Brazil. Such constraints are pertinent since Brazil has not joined the Non-Proliferation Treaty (NPT), has not been willing to give a general commitment to accepting safeguards on all of its nuclear facilities, has not ruled out the development of “peaceful nuclear explosives”, and has recently contracted with the FRG to acquire uranium enrichment technology and a chemical reprocessing facility to recover plutonium from spent reactor fuel. Although these latter facilities are to be safeguarded by the IAEA, many in the U.S. have expressed concern that placing such potential in Brazilian hands is dangerous, and it may well stimulate Argentina to posture itself for nuclear weapon development.

We have been putting off our negotiations with Brazil (and straining our bilateral relations as a result) for almost two years while trying to devise the substance of a new agreement which would meet our non-proliferation concerns, would hold open the Brazilian market for U.S. reactor and fuel sales, and would have a reasonable chance of being acceptable to Brazil. Now that we have come to an understanding with the other major nuclear exporting countries on common export policies to reduce proliferation risk, we are in a position to take the next step with Brazil in trying to reach agreement. Furthermore, a new agreement might offer the opportunity to close some of the loop-holes we perceive in the Brazil-FRG deal; namely we could control Brazilian acquisition of plutonium by limiting the reprocessing of U.S. fuel converted in German reactors. This last would be a definite plus in gaining the requisite Congressional approval for a new agreement with Brazil—and without strong proliferation restraints such approval would be very uncertain.

The study proposes that our contact with Brazil be carried out in two steps: First, low-key exploratory talks, without commitment on either side to proceed further, to determine the Brazilian attitude toward the types of restraints and conditions we have in mind. Following these initial exploratory talks, we would be prepared to proceed with full scale negotiations if our initial contacts reveal a sufficient common ground of mutual interest.

State has requested that you approve the initial exploratory talks. Even though the talks are not intended to involve formal positions or tentative agreement, State feels that the Brazilian nuclear issue is sufficiently sensitive in Congress that it is advisable to have your explicit sanction for a contact with Brazil on this subject. If we were to reach the next stage involving negotiation with Brazil, your approval would then be sought for our detailed negotiating position. ACDA, ERDA, and DOD agree with this approach, and I concur.

The Secretary of State will be in Brazil on February 19, and it may be useful for him to indicate, at that time, our willingness to hold exploratory talks on the question of nuclear cooperation.

Recommendation

That you approve my signing the memorandum at Tab A.

PROPOSED NEGOTIATIONS WITH THE BRAZILIAN GOVERNMENT ON A NEW NUCLEAR AGREEMENT

The Problem

To decide the nature of the position that the United States should take in negotiating a new agreement with Brazil on peaceful nuclear cooperation.

Background/Analysis

Reasons for Proceeding: For more than a year, Brazil has been awaiting our proposals for a revision of the existing ERDA civilian nuclear agreement for cooperation. A draft amendment to the 1972 U.S.-Brazilian Agreement which was presented for the consideration of the Brazilian Government in 1973, was withdrawn by the U.S. in 1974 to permit us to reflect our new and more rigorous non-proliferation policies which were then being considered. However, no substitute draft has yet been forwarded. Moreover, we have consciously deferred our Brazilian negotiations on the grounds that the higher priority Iranian agreement might establish a new frame of reference for all new nuclear agreements. As of late, we have been delaying a resumption of negotiations to await the outcome of the London Suppliers Conference so as to assure that our proposals are compatible with the London consensus. Throughout this period, however, we have repeatedly assured the GOB that our proposals for a new agreement would be forthcoming. Moreover, we have repeatedly expressed a general desire to cooperate with Brazil in the nuclear field as evidenced by Secretary Kissinger’s message of June 20 to Foreign Minister Silveira.

Although our nuclear negotiations with Iran are still in progress (with the outcome in doubt), we believe that further delay in responding to Brazilian interests could have serious adverse effects on our overall relationships. Indeed, the U.S. Embassy has ranked the delays in the resumption of our negotiations as one of the most serious sources of strain in our bilateral relations with Brazil. These strains have undoubtedly been heightened by the furor that developed in this country over the recent Brazilian-FRG Agreement, and the charges in Brazil and Germany that U.S. expressions of proliferation concerns about the agreement masked commercial pique over having “lost” a lucrative sale for U.S. suppliers. Elements in the GOB are, at best, interpreting our continued silence as a failure to understand and support Brazil’s desire to expand its nuclear power capability as a tool of development.

We thus have a strong incentive to demonstrate that we are still interested in developing a common basis for nuclear cooperation with the GOB. Also, there is only a limited advantage in awaiting the results of our Iranian negotiations, since the two agreements will in any case have their own distinctive features since Iran is an NPT party, whereas Brazil is not. Most importantly, the results of the London Suppliers Group now are clearly in hand for us to take into account in the negotiations. Accordingly, while the challenges in the face of a new U.S.-Brazilian agreement may be formidable, it is in our interest to resume the negotiations as soon as possible to ward off further serious damage to our nuclear relationships. More positively, we also have a very real incentive to seek areas of mutual interest that can convert what has proven to be a troubled technical area into a field of constructive interaction. This could serve to strengthen the overall bilateral relationships. A new agreement with Brazil also could enable us to retain some positive influence over Brazil’s future nuclear power program and could serve to preserve some continuing U.S. role in a program of major national importance to the GOB. Accordingly, this paper recommends the prompt initiation of exploratory talks with the GOB to be followed by full-scale negotiations if a sufficient basis for agreement appears in sight. A series of recommended positions to be employed by the U.S. is also set forth.

[Omitted here are sections entitled “Brazilian Interests,” “Key Issues To Be Considered,” “Recommendations,” and “Conclusion.”]

1. Summary: An interagency working group devised a process for negotiations with Brazil to prevent the spread of nuclear materials and technology. Low-key exploratory talks would be followed by full-scale negotiations if enough common ground existed.

   Source: Ford Library, National Security Adviser, Presidential Country Files for Latin America, Box 2, Brazil (2). Secret. Sent for action. The President approved the recommendation. Attached but not published is Tab A, a February 17 memorandum from Scowcroft to Kissinger, Rumsfeld, Ilké, and Seamans, notifying them of the President’s decision.