462. Telegram From the Embassy in the Federal Republic of Germany to the Department of State1

22524. For Deputy Secretary Christopher. Subject: FRG Sale of Nuclear Reactor to Argentina—Safeguards Issue. Ref: New Delhi 22430.2

1. (Secret—Entire text).

2. Action requested: See paragraph 13.

3. Summary: We are concerned that the safeguards negotiations for the sale of a nuclear reactor by the FRG to Argentina may result in something less than full-scope safeguards or their equivalent on Argen[Page 1138]tine facilities. This matter has the potential for developing into a problem in U.S.–FRG relations. I suggest you call in Ambassador Hermes for discussions on the Argentine deal. End summary.

4. As you know, the U.S. has been pushing very hard to get the FRG to require full-scope NPT-type safeguards (over all Argentine nuclear facilities) in its sale of a nuclear power plant (Atucha II) to Argentina.

5. This effort has been underway for some time. In addition to the demarchés by the Embassy, there have been several visits by Ambassador Gerard Smith and Assistant Secretary Tom Pickering and many by other representatives of the Department and of ACDA during which this subject has been discussed and the U.S. position reiterated.

6. The U.S. originally asked Canada, the FRG and Switzerland, who were bidders on the reactor and heavy water manufacturing plant, not only to require full-scope safeguards on the sale of both of these facilities but also to require Argentina to postpone indefinitely the reprocessing of nuclear fuel.

7. While the bidders were unwilling to tie reprocessing to these sales, the U.S. was given to understand that Canada and the FRG would require full-scope safeguards. Further, the FRG repeated many times that it would “not undercut” the Canadians by offering softer safeguards to Argentina.

8. Late last July, we heard a new theme from the FRG,3 namely that it would require full-scope NPT-type safeguards if it sold both the reactor and the heavy water plant to Argentina, but if the order were split and the FRG sold only the reactor (which turned out to be the case), then Germany would consult with its partners (U.S., Canada and Switzerland) before defining the safeguards package to be offered to Argentina.

9. With this change in tone and the deviation from what we and the Canadians had been led to believe, namely that the FRG would adhere to the same position as Canada and require full-scope NPT-type safeguards in connection with even a reactor-only sale, both the U.S. and Canada initiated another series of demarchés.

10. We and Canadians were then told that the FRG would again approach Argentina and request full-scope NPT-type safeguards but if these were not accepted by Argentina, the FRG had developed a “pragmatic solution” to the problem which would avoid the objectionable (to Argentina) full-scope NPT-type safeguards terminology but would be a de facto equivalent. The FRG expressed confidence to Ambassador [Page 1139] Smith and the Embassy that it could obtain Argentine agreement to the “pragmatic solution.”

11. Now, in the cable received by the Embassy from Gerry Smith in New Delhi, reporting his conversation with State Secretary Haunschild (Reftel), it appears that the initial negotiating position of the FRG will not be to request full-scope safeguards, but rather will be the “pragmatic solution.” Further, it appears, [1 line not declassified] that the opening negotiating position of Argentina will be much less than full-scope safeguards, or the pragmatic solution. In fact, it will be less than the nuclear suppliers’ group guidelines. (We also have seen [1 line not declassified] despite assurances we have had to the contrary, Argentina has no intention of signing the Tlatelolco Treaty after completion of the deal with the FRG and Switzerland.)

12. If one assumes that in the course of negotiations some compromise is reached between the opening positions of the FRG and Argentina, the result clearly will be less than the full-scope safeguards we desire, and may well leave the door open for Argentina to pursue a nuclear option outside of international safeguards leading to nuclear weapons capability.

13. Action requested: In light of this very serious and possibly deteriorating safeguards position, I recommend that you call in Ambassador Hermes and inform him of the serious concern of the U.S. that the FRG may be heading for a compromise on safeguards which not only leaves the world vulnerable to the development of a nuclear weapons capability in Argentina but also can establish a very undesirable precedent at a time when we all are seeking stronger safeguards against proliferation.

14. I am concerned that this whole matter has the potential of developing into a problem of considerable import in U.S.–FRG relations. For this reason, in addition to proliferation considerations, I believe it would be desirable to discuss the situation frankly with Hermes (who was closely involved in the negotiations with Argentina in his previous position) to make sure that the FRG understands at a high level the risks of the course they apparently are contemplating.

  1. Source: National Archives, RG 59, Central Foreign Policy Files, P840133–2108. Secret; Nodis.
  2. Telegram 22430 from New Delhi, December 7, reported that the Federal Republic of Germany was “very disturbed” that the “US was not [nit] picking and trying to dictate tactics and FRG resented this. If we kept it up it would not help cooperation.” (National Archives, RG 59, Central Foreign Policy Files, D790569–0354)
  3. Not found.