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384. Memorandum of Conversation1

SUBJECT

  • Post-INFCE Explorations

PARTICIPANTS

  • U.S.
  • Ambassador Gerard Smith
  • Frank Hodsoll
  • FRG
  • Ambassador Peter Hermes
  • Mr. Stephan Von Welck

SUMMARY

Ambassador Smith opened the Post-INFCE discussion making clear he was continuing his personal and confidential explorations and that no US policy decisions had been made. Smith said that he had been authorized to explore (without commitment) ideas such as programmatic approvals of reprocessing and plutonium use, as a basis for the US/EURATOM renegotiation. Smith reviewed needed improvements in the non-proliferation regime (with particular emphasis on full-scope safeguards (FSS), better cooperation regarding problem countries, improved safeguards and avoiding premature or excessive plutonium separation). He stressed that progress on these elements would be needed if we were to move toward greater predictability in supply and retransfer relationships.

Ambassador Hermes stated he had conveyed our views on rescheduling the visit to Bonn to Lautenschlager and Haunschild. While he had not received final word he believed a Smith visit in September rather than August would probably be alright. We suggested September 12 as a possible date.

Hermes listened to our points which he said he would convey to Bonn. His questions focused on:

—How could we resolve the inconsistency of seeking NNPA conditions which were more onerous than those already set out in our international agreements?

—Who would have to agree to FSS and on what basis?

—How would the US distinguish the Indian case?

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—What would be the “designated areas” where advance consents to reprocessing of US-origin material and use of the resulting plutonium would be permitted?

—What problems did we see with our approach?

END SUMMARY

1. The meeting opened with a brief discussion of the current situation in Pakistan. Smith said he did not understand how Germany could doubt the proliferation risk in that country; Hermes responded that some of the information they had had not been accurate; they were aware only of relatively small scale basement operations. Smith responded that the Paks were proceeding with both reprocessing and enrichment; he suggested a lot had happened since our last technical briefing of the Germans and that perhaps a further technical discussion should take place. Hermes said he would take this up with Bonn.

2. Hermes then said he had conveyed to Bonn Smith’s preferences on timing of his post-INFCE Bonn trip. Our suggestion of September was probably OK; but, since Lautenschlager and Haunschild were on leave, Hermes would have to confirm later. Smith said that, if for any reason the FRG wanted him in Bonn in August, he would be prepared to go.

3. Smith then made the following points on his post-INFCE explorations:

—The President had authorized him to explore certain ideas.

—If key countries were willing to join together to modernize the non-proliferation regime, the U.S. might be able to make its rules on reprocessing of US-origin spent fuel, and plutonium use more flexible. We should be able to move to a programmatic, instead of case-by-case, approach. Would EURATOM give prior consent rights if we gave advance approvals for reprocessing and plutonium use in breeder and advanced reactor RD&D programs?

—If the President decides to move in this direction on reprocessing and plutonium use, it would only be in the context of broader movement toward non-proliferation improvements including:

FSS.

—Better cooperation with problem countries (e.g., Pakistan).

—Substantially larger commitments to improving safeguards.

—New reprocessing capacity would be established only where needed for breeders.

—New enrichment capacity would be designed only for production of LEU.

—An effective IPS would be established.

4. Hodsoll then noted that we were in addition seeking expanded commitments to restrain the export of sensitive technologies, more proliferation resistant reprocessing, cooperation on “once through” fuel cycle and deferral of commercial thermal recycle.

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5. Hermes asked what was the situation with regard to prior consent before the NNPA. Smith said we do not have consent rights now, and that in order to get such rights we might provide an “automatic OK” for specified programs. Hermes asked whether the FRG would “designate areas and the US would say yes or no”. Smith said the FRG would initially designate the areas for programmatic consent.

6. Hermes noted that the US and FRG were now in a transitional period through March 1981.2 Smith said that, if USEURATOM negotiations were underway, the US could extend the deadline. Smith noted that we would have to cease exports to EURATOM unless the deadline were extended.

7. Hermes then asked if the new procedure being suggested by Smith would be tougher than the procedure that currently existed in EURATOM: i.e., US-origin material could be used for peaceful, safeguarded uses. Smith said the new procedure was required to comply with the NNPA. Hermes noted that the NNPA contravened the existing agreement with EURATOM countries. He asked what the impact of our law was on international agreements which he thought were “the supreme law of the land”. Smith noted that he believed that under U.S. law legislation subsequent in time to a treaty superseded the treaty for US domestic purposes.

8. Hermes said the FRG wanted development of an effective IPS. He said the suggestions outlined by Smith constituted in effect “a grand design”. Smith said we had to aim high to achieve improvements.

9. Smith then reported on our bilaterals with the UK 3 and France.4 The French told us it would be difficult to predict future needs, but did not rule out in principle prior consent plus advance agreement on how it would be exercised. The UK similarly did not rule this out in principle, but were uncertain regarding their breeder program. Smith noted [Page 982]he would be meeting with the Japanese next week and with the British and French again in September.

10. Smith stressed there would not be quick action in the US given our pending elections. He said he was trying to lay the groundwork for EURATOM negotiations thereafter.

11. Smith then noted a number of other matters in which he thought the Germans would be interested:

—We were considering longer-term licensing of LEU. Hermes thought this would be an important improvement.

—Our voluntary offer had been ratified by Senate.5 Hermes said the FRG was pleased.

—The US was working on improved procedures for licensing exports of HEU.

—Carnesale would be a good NRC chairman.

12. Hermes then posed four sets of questions:

a. FSS. Would we get all suppliers to agree on an FSS approach that included enriched uranium and natural uranium, as well as equipment and technology? Specifically, would the USSR agree? Smith said the Soviets had indicated that if all other suppliers agreed they could agree to an FSS approach. There was no problem in Europe as all non-nuclear weapon states in Western Europe were NPT parties, and the UK and France had indicated willingness to place their civil facilities under safeguards. Hermes queried whether Italy, Switzerland and South Africa would agree to FSS. He noted that we needed today more countries to make FSS effective than when the Supplier Guidelines were agreed. He asked whether agreement would have to be multilateral and whether we planned to reconvene the NSG. Smith responded that we did not envisage reconvening the NSG, but assumed a series of bilateral agreements reflecting the FSS approach.

Hermes thought asking consumers to accept FSS as a condition of trade was a big undertaking. He wondered what the legal basis for it might be. Smith noted that the majority of countries had accepted FSS through NPT. Hermes said the problem was “the threshold countries”. These were not NPT parties. He asked: would our approach cause difficulty in the Argentine and Brazilian cases? Hodsoll stressed we were only talking about new commitments.

Hermes said the FRG “quite agreed on the principle of FSS for all countries.” The difficulty was not the principle, but the imposition of FSS on other countries. He reiterated the German view that it was better to “control, than deny, the have-nots”.

b. Distinguishing Tarapur. How does the US distinguish our FSS approach from our recent decision to support shipments of fuel to Tarapur? Smith responded that the NNPA permitted such shipments where license applications and shipments would have been made in time prior to March 1980 but for USG blockage. He also noted that the [Page 983]Indian shipments were pursuant to prior contracts which provided for shipments to the 1990s; our FSS approach would only apply to “new commitments”. In response to Hermes’ question, Smith stated that we expected the Tarapur review period provided in the NNPA to expire in early October. He gave Hermes our current reading on Congressional prospects: the House would vote against the President; while it was close, we hoped the Senate would sustain the President.

c. Programmatic Consent. What “designated area” would be eligible for programmatic approvals? Smith said that we envisaged providing such approvals for breeder and advanced reactor RD&D (including reprocessing for breeder needs, but not for commercial thermal recycle). Smith said the question of thermal recycle RD&D was not clear in our minds. Smith noted thermal recycle was particularly troublesome because it could justify plutonium flows wherever there are reactors. He said this had been a particular concern in India; if we did not agree to the pending Tarapur licenses, there was a substantial risk that India would reprocess and recycle US-origin spent fuel and thus establish a precedent for recycle linked to small scale reprocessing plants.

Hermes said the Germans still planned some thermal recycle programs and implied that the US approach could cause Germany a problem. Hodsoll noted that our approach to thermal recycle was only for a limited (10–15 year) period during which we doubted there were likely to be moves in any country towards commercial thermal recycle. He noted that our approach would not preclude case-by-case consideration of specific needs for thermal recycle R&D.

d. Problems with US Approach. What did we envisage the problems would be with our approach? Smith responded that he understood that our approach to thermal recycle might pose a problem for the FRG, Belgium and Japan; and that the FSS export condition might be difficult for the FRG, but he assumed (if the French went along with FSS) the FRG would not want to be isolated. Program designations might also offer difficulties.

  1. Source: Carter Library, National Security Affairs, Staff Material, Global Issues, Oplinger/Bloomfield File, Box 52, Proliferation: Smith, Gerard, 7/80. Confidential; Nodis.
  2. Telegram 25455 to Paris, January 29, discussed Smith’s January 14 and 16 bilateral discussions with the French on non-proliferation. Smith told the French Delegation “that a recommendation for a one-year extension of the EURATOM deadline” set to expire in March 1981 “to agree to US prior consent on reprocessing and plutonium use had been forwarded to the White House.” (National Archives, RG 59, Central Foreign Policy File, D800052–0771)
  3. Telegram 14956 from London, July 15, reported that during the July 14 U.S.–UK bilateral meeting on post-INFCE explorations, the UK government said “principle of US-origin material and use of the derived plutonium not necessarily a problem, but predictability in exercise of such consent rights would be needed to prevent it becoming so.” (National Archives, RG 59, Central Foreign Policy File, P80029–1100)
  4. No record of the U.S.-France bilateral talks has been found. Telegram 134778 to Bonn, May 22, reported that during the May 13 U.S.–FRG bilateral meeting on post-INFCE explorations, the FRG Delegation said “the FRG and France are united in their opposition to U.S. prior consent rights.” (National Archives, RG 59, Central Foreign Policy File, D800252–0605)
  5. The U.S. voluntarily offered to accept IAEA safeguards for the transfer or export of nuclear materials.