Foreign Relations of the United States, 1977–1980, Volume XXVI, Arms Control and Nonproliferation

373. Memorandum From Ambassador-at-Large and Special Representative for Non-Proliferation Matters Smith to President Carter¹

Washington, July 27, 1979

SUBJECT

• Nonproliferation

I.

The Secretary of State’s July 20 Nonproliferation Status Report² to you indicates the following:

—The International Nuclear Fuel Cycle Evaluation (INFCE) will end in February 1980 with only modest results.

—We face critical decisions by mid-1980: waiver of the deadline for renegotiation of our agreement with the European Community as the Europeans will continue to refuse us a reprocessing veto; possible cut-offs of nuclear exports to India and South Africa; and a major issue with Japan if we insist on continuance of case-by-case review of proposals for reprocessing of US-origin spent fuel and continued deferral of the Japanese planned reprocessing program.

—We will in addition face criticism at the NPT Review Conference in June 1980.

Further, our task of working out acceptable new international arrangements is complicated by the legislative requirement for changes in existing supply commitments and the shift of the nuclear export licensing function to the NRC.

II.

We are now beginning a thorough and systematic exploration of international nuclear policy in the post-INFCE period. An interagency group will be getting under way. Other countries are looking for a degree of harmonization of nuclear policies in the aftermath of INFCE. International explorations on a more specific basis than in the past are called for. Unless otherwise directed, I propose to go forward with the efforts outlined in this memorandum on the basis of the following observations.

1. Although there is enhanced concern in various industrial countries and to some extent in developing countries about the nuclear proliferation threat (largely owing to your initiative, but reinforced by developments in Pakistan),³ many nuclear nations view U.S. policy as an effort to deny them autonomy (however unrealistic that possibility may be in some cases). There is a widespread belief, and it is notable that even Canada may be moving in this direction, that restrictions on sensitive facilities are likely to become less effective or even counterproductive where countries in which they are located or planned agree to IAEA safeguards on all their civil nuclear facilities (full-scope safeguards).

2. There is fairly wide acceptance, largely as a result of efforts in INFCE and elsewhere, of the views that (a) the economic advantage of recycling of plutonium in thermal reactors is marginal, at best; and (b) reprocessing is not a necessary precondition for waste disposal.

3. There is substantial acceptance in Japan, France, the UK, the FRG, other European nations, and the USSR, of the need to prevent widespread construction of national enrichment and reprocessing plants and the spread of plutonium and high enriched uranium. But none of these countries is prepared to imitate the U.S. by foreswearing reprocessing (although the FRG has been forced by domestic pressures to accept deferral of their proposed major commercial facility). While the first four agree that multinational approaches to sensitive facilities and materials are of interest for nonproliferation reasons, they, like the U.S., resist acceptance of dependence on multinational plants.

4. INFCE will not come up with either fuel cycle or hardware “fixes” which will significantly reduce the potential for diversions to weapons programs.

5. With demands for nuclear power much reduced and sources of nuclear equipment and enrichment services increasing, U.S. ability to influence the conditions of international nuclear trade has greatly diminished. It is likely to diminish further.

III.

In light of these observations and in order not to be further isolated from influencing nuclear developments abroad, we need to develop new approaches (reflecting the incentives and institutions foreshadowed in your 1977 speech and the Nuclear Non-Proliferation Act (NNPA)) designed to achieve our basic nonproliferation objectives. Our best hope lies in developing a consensus among the Summit 7, certain other important industrialized countries and some key LDC’s.

I propose, in both internal efforts and in exploratory talks with other governments, to explore a range of possibilities building on NPT and IAEA safeguards, while maintaining to the extent possible supplier restraints. These possibilities would be based on the following:

1. An understanding with the major industrial states that we would not exercise a veto on nuclear trade among them or on their development of sensitive facilities involving materials of U.S. origin; provided (i) they accept full-scope and improved safeguards on all civil nuclear facilities and an appropriate institutional framework for their operation and the management of the materials they produce, and (ii) they have a reasonable economic case for building sensitive plants. We would interpret reprocessing in order to obtain plutonium for certain research, for breeders and for other advanced reactors as “reasonable” for countries with large programs, but not in the near to medium term for the recycle in conventional thermal reactors or as a precursor to waste disposal. (Eventual U.S. agreement to this point could require legislative changes; our exploratory talks would note this fact.)

2. The development of international and multinational institutions as a further means of reducing the likelihood that critical materials will be diverted to making weapons. This would include (as foreshadowed in the NNPA) willingness to consider foreign participation in U.S. enrichment capacity.

3. As a part of such institutional development, early establishment of an effective international plutonium storage/management system. Since accumulation of substantial stocks of plutonium by some countries is inevitable, nuclear cooperation with them and other nations which might acquire or produce plutonium should be conditioned on their willingness to place excess civil plutonium stocks under international control. This should include U.S. willingness (as proposed by the Ford Administration) to place U.S. excess civil plutonium in an effective control system.

4. Short- and long-term measures to provide greater assurance of fuel supply, especially to countries stopping short of full fuel cycles.

5. Technical cooperation and assistance regarding (i) three major problems of nuclear power (safety, spent fuel disposition and waste disposal) and where appropriate (ii) research and development on breeders and other advanced nuclear technologies.

6. Improved safeguards for enrichment, reprocessing and MOX fabrication plants, and undertakings to limit new enrichment capacity to low enrichment.

In sum, we plan to begin exploration of what post-INFCE regimes might look like. Hopefully, we will as a result be able to provide you with a realistic assessment of the best possible alternatives which could be negotiable with other countries. You would then be in a better position to establish post-INFCE U.S. policy.

I am taking the liberty of sending a copy of this memorandum to the Secretaries of State and Energy, and the Director of ACDA.

Gerard Smith⁴

1. Source: Carter Library, National Security Affairs, Staff Material, Global Issues, Oplinger/Bloomfield File, Box 31, Chron: 7/79. Secret.
2. See Document 372.
3. On June 25, Smith informed IAEA Director General Eklund about “the seriousness with which the United States viewed” the “evidence” that Pakistan “was pursuing a nuclear explosive program, mentioning activity in reprocessing, gas centrifuge enrichment and nuclear explosive design.” (Telegram 178818 to Vienna, July 11; National Archives, RG 59, Central Foreign Policy File, P840167–2015)
4. Smith signed the memorandum “Gerry.”