379. Memorandum From Ambassador-at-Large and Special Representative for Non-Proliferation Matters Smith to President Carter 1

SUBJECT

  • Nonproliferation Strategy for 1980 and Beyond

The purpose of this memorandum is to seek approval of a general strategy to improve our nonproliferation policy in 1980. We will ask for authority to make specific moves as required. The strategy in large part makes elements of our current policy more detailed and specific. The most critical issues involve (i) European and Japanese reprocessing of U.S. origin material and use of the resulting plutonium and (ii) improvements to the nonproliferation regime. Nothing proposed for 1980 would require any change in the law.

I

At the start of your administration, it was important promptly to increase awareness of the need to slow the spread of sensitive facilities which were making control of nuclear proliferation more difficult. [Page 963]Since 1977, the International Nuclear Fuel Cycle Evaluation (INFCE), which you initiated, and bilateral discussions have provided us and others with better perceptions of both the problems and possible solutions.

Several things have become clear:

1. We are seen to be an unreliable supplier and ambivalent about nuclear power.2 Alternate suppliers are emerging and our influence over nuclear trade and programs is becoming increasingly limited. Our influence over reprocessing and plutonium use is particularly limited in that we lack consent rights regarding EURATOM countries and cannot politically treat Japan less favorably than Europe.

2. While for domestic reasons many nuclear programs have been slowed in recent years and the proliferation dangers inherent in plutonium based fuel cycles are now better perceived (in large part as a result of U.S. efforts), breeder and advanced reactor options are still perceived to be of great importance by major countries in Europe and Japan. These programs will continue even if we do not agree; their importance is affirmed by INFCE. To the extent U.S. policy attempts to interfere with these programs, it is seen to threaten these countries’ energy security.3

3. The NPT regime is the foundation of nonproliferation policy but is increasingly attacked by countries who see nuclear suppliers as not keeping their part of the bargain—“fullest possible exchange . . . for the peaceful uses of nuclear energy.” U.S. policy is singled out as particularly damaging.

4. We need to develop a joint strategy with the major suppliers (our allies with the most advanced nuclear programs—UK, France, FRG, Japan) to (a) improve the nonproliferation regime and (b) agree on criteria for plutonium uses and related reprocessing.

5. We need also to make NPT or equivalent (Tlatelolco) obligations more attractive, provide greater supply assurances to countries ac[Page 964]cepting these obligations, and isolate to a greater extent the problem countries.4

II

We face major decisions in 1980 that were deferred for the period of INFCE. These involve requests for consent to reprocessing of U.S. origin fuel in France, the UK and Japan; the conditions of our consent to the use of the resulting plutonium; and the EURATOM renegotiation aimed at giving us such consent rights where we will have to specify how we would exercise them. We also face decisions on implementation of the statutory requirement that countries with which we cooperate have safeguards on all their nuclear activities (full-scope safeguards). And, we face an NPT Review Conference in August, where restraints on international nuclear cooperation will be a major issue.

Following INFCE’s concluding Plenary February 25–27, we should demonstrate that its analysis is being taken into account in U.S. policy and that we are willing to become a more reliable supplier. This is essential if we are to limit the spread of sensitive facilities and stop the current move towards multilateral negotiations of criteria for nuclear trade which could result in U.S. isolation, North-South confrontation and setbacks for our nonproliferation policy.5

Beyond 1980, we should consider amendment of the NNPA to (i) eliminate its retroactive provisions, and (ii) if not already accomplished by reorganization plan, relieve the NRC of its role in export control (except possibly with respect to safety). These issues need not, however, now be resolved, and nothing proposed in this memorandum limits your freedom of action here.

III

Any strategy to reduce proliferation risks associated with the fuel cycle must begin with the other major suppliers. Without their support, U.S. nonproliferation policy can have only limited effect.6

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These countries are allies, have accepted NPT or equivalent obligations, and have large electric grids and advanced nuclear programs. Their investigation or pursuit of breeders and other advanced fuel cycle option is understandable.

The proposed strategy involves private negotiations with these countries aimed at achieving a bargain that helps meet their wish for more predictable use of U.S. origin spent fuel, our wish to avoid precedents which could lead to premature spread of plutonium, and our mutual interest in an improved nonproliferation regime.7 In addition, the strategy seeks to reduce apparent discrimination by providing (i) for new benefits to those accepting NPT or equivalent obligations and (ii) for the possibility of additional countries joining the preferred group when their programs and nonproliferation assurances warrant.8

The highlights of the strategy are:9

1. To seek supplier and other support for (a) making NPT or equivalent full-scope safeguards (FSS) a condition of new supply commitments; (b) relating reprocessing and plutonium use to well defined, reasonably safe and limited, programs (breeders and advanced reactors) and deferring commitments to commercial thermal recycle; (c) an effective international plutonium storage (IPS) regime; and (d) enhanced cooperation in dealing with countries posing significant proliferation risks.10

2. To provide U.S. agreement for a period of years for the advanced countries (in EURATOM and Japan) to reprocess U.S. origin spent fuel and use the resulting plutonium in well defined breeder and advanced reactor programs.

3. To provide new benefits, including longer term and possibly up to “life-of-reactor” fuel assurance (LEU), to countries which accept NPT or equivalent FSS and do not otherwise demonstrably pose a significant proliferation risk.11

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IV

Much of this proposed 1980 strategy is consistent with present policy; none of it requires changes in law. The principal differences involve (i) longer term and possibly up to “life-of-reactor” fuel assurance, (ii) agreement for a period of years for the advanced countries to reprocess U.S. origin spent fuel and use the resulting plutonium for breeder and advanced reactor RD&D, and (iii) support for an effective IPS. (These differences and their rationale are discussed in Tabs C, G and H.)12

V

I propose we:

1. Conduct negotiations along these lines in 1980.

2. Seek the support of other suppliers for increased fuel supply assurance and appropriate technical assistance and cooperation for NPT or equivalent countries, particularly developing countries.13

Attachments:

Tab A - Summary of Strategy

Tab B - Country Distinction Analysis

Tab C - Major Differences Between Proposed Strategy and Current Policy

Tab D - Foreign Reactions to U.S. Policy and Law

Tab E - Summary of INFCE Results

Tab F - Views on Major Problems and Opportunities for the Post-INFCE Period

Tab G - Issues Paper on Approval of Reprocessing and Plutonium Use

Tab H - Issues Paper on International Plutonium Storage14

  1. Source: Library of Congress, Manuscript Division, Harold Brown Papers, Box 6, Non-Proliferation. Secret. Sent under cover of a February 19 memorandum from Vance to Carter. Vance advised Carter to approve “the general strategy he [Smith] is suggesting” and noted that as the INFCE “draws to a close, it is important that we remove unnecessary causes of division with our Allies which do not help nonproliferation, and that we begin to build a better international nonproliferation regime. An indispensable element is that the U.S. be considered a reliable and predictable supplier.”
  2. Vance underlined the phrase “an unreliable supplier and ambivalent about nuclear power” and wrote in the left-hand margin next to this paragraph: “You need to tell us whether we are unreliable because of Exec. branch policy, because of Cong. legislation or both—Being unreliable may not be as bad as giving materials which lead countries to have capabilities without safeguards.”
  3. Vance underlined the words “their importance is affirmed by INFCE” and “interfere” in this paragraph. In the left-hand margin next to this paragraph, Vance wrote “in preparation for this meeting you need a brief summary of INFCE conclusion and a comment as to why we were not successful in convincing people of our views on the dangers. This summary could either be a TAB, or if short enough in the talker. Do we now accept the INFCE conclusion? Do we accept that interference threatens their energy security?” An unknown hand wrote “in part.”
  4. Vance underlined the phrase “greater supply assurances to countries accepting these obligations, and isolate” and wrote in the left-hand margin “what is the example of countries where we have not given supply assurances when they have accepted safeguards.” An unknown hand wrote: “NPA enjoins us to do better but we don’t;” “none;” “case-by-case basis only and general policy;” “5 yr licensing recently. But most want link licensing to life of reactor;” and “For breeder reactors (INFCE agrees only with lgr countries) can have [illegible] for govts using spent fuel for reprocessing now have [illegible] consent (transfer or reprocess), Regularize. In return, defer thermal recycle. Breeders and adv reactors are most.”
  5. In the left-hand margin next to this paragraph an unknown hand bracketed the first sentence, drew a line toward the word “stop” and wrote “?”
  6. An unknown hand bracketed this paragraph in the left-hand margin.
  7. An unknown hand bracketed the first three lines of this paragraph in the left-hand margin.
  8. Vance underlined the words “new benefits to” and wrote in the left-hand margin next to this paragraph “we move from sticks to carrots and back and forth, depending on what has not worked recently.”
  9. See Tab A for details. [Footnote is in the original.]
  10. In the left-hand margin next to this paragraph an unknown hand wrote “Do tab on breeder thermal—Adv Reac.”
  11. Vance bracketed the phrase “to countries which accept NPT or equivalent FSS and do not otherwise demonstrably pose a significant risk” and wrote in the left-hand margin “Who are these countries—I doubt they are the ones we should pay much attention to.” An unknown hand wrote “Korea, Yugoslavia, Rumania (politically important in NPT context).”
  12. Vance bracketed the phrase “countries to reprocess U.S. origin spent fuel and use the resulting plutonium for breeder and advanced reactor RD&D, and (iii) support for an effective IPS” and wrote in the left-hand margin “with limits on transfer?” An unknown hand wrote “Yes. Negotiated.”
  13. Carter did not indicate a preference with respect to the recommendation.
  14. Tabs A–H are attached but not printed.