Cablegate: New Zealand has Conditions for Us-India Deal

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C O N F I D E N T I A L WELLINGTON 000257

SIPDIS

STATE FOR EAP/ANP

E.O. 12958: DECL: 08/19/2023
TAGS: PARM PREL ETTC NZ
SUBJECT: NEW ZEALAND HAS CONDITIONS FOR US-INDIA DEAL

REF: STATE 85948

Classified By: DCM David J. Keegan; Reason 1.4 (b) and (d)

1. (C) In an August 20 meeting between the Ambassador and
Minister for Disarmament Phil Goff, the Ambassador pointed
out the strategic and historic importance of the US-India
deal, and the very real possibility that the Indians could
shelve it if the NSG demands proved too politically difficult
for the GOI.

2. (C) Goff responded that New Zealand strongly supports
the objectives the U.S. had in negotiating the US-India
Civilian Nuclear Cooperation Initiative. It does not want to
be "unnecessarily obstructive" in reviewing the deal in the
Nuclear Suppliers Group (NSG), but he said that the GNZ sees
a downside to an India exemption. Other countries gave up
nuclear programs and signed the NPT; that raises the prospect
of a double standard if India gets something without being
held to the same criteria, noted Goff. However, because New
Zealand recognizes that this deal represents an opportunity
for the international community, the question is how to get
an NSG agreement that does not negatively impact on the
global nonproliferation regime.

3. (C) Goff outlined five areas where New Zealand had
concerns which it needed addressed before it could support
the proposed initiative and approve the exemption for India:

-- The first area is nuclear testing; New Zealand wants to
add language that would extend to all NSG states the Hyde
Act's sanctions in the event of a future Indian nuclear test.

-- New Zealand would like to see the IAEA Additional
Protocol established as a condition for supply of nuclear
materials to India.

-- New Zealand wants measures in place to restrict the
transfers of sensitive technology, such those related to
enrichment and reprocessing. The GNZ concern is the
possibility of India engaging in nuclear proliferation
activities for military purposes.

-- The GNZ believes a review and reporting mechanism should
be in put into place, perhaps to occur every two years.

-- If India unilaterally terminates the safeguards
agreement, the return of nuclear fuel and supplies should
apply to all NSG countries.

Goff said that he thought the U.S. would share the same
objectives that led New Zealand to propose these conditions.
However, New Zealand suspected that others -- he named France
and Russia -- might allow commercial interests to outweigh
non-proliferation concerns. These conditions would make that
more difficult.

4. (C) Goff explained that New Zealand does differentiate
India from Pakistan on nonproliferation matters and accepts
that India has been a better nuclear citizen despite
remaining outside the Non-Proliferation Treaty (NPT),
although he criticized India's nuclear testing record and
military weapons program. And while New Zealand is "not a
great fan of nuclear energy," Goff allowed that New Zealand
is blessed with other options. He noted that the GNZ
understands that other countries' energy security and GHG
emission profiles are different and New Zealand does not want
to stand in the way of their pursuit of legitimate energy
needs.

5. (C) Goff regretted that he was out of the country during
Secretary Rice's July 26 visit to Auckland, and would have
liked to engage with her on the India deal. He said that New
Zealand appreciates the USG desire for a clean exemption and
India's domestic political situation, but that New Zealand
and like-minded countries such as Ireland, Sweden, Norway,
and the Netherlands want to ensure that this is the best deal
possible. He said that an NSG discussion will be focused on
possible changes to the text to reflect the concerns of the
like-minded group, and that a second meeting will be likely.
New Zealand, he continued, will go into the meeting with
flexibility but must adhere to its bottom lines. If there is
no flexibility on addressing New Zealand's concerns, it would
be very difficult for New Zealand to support the deal, said
Goff.

6. (C) Separately, Ministry of Foreign Affairs Deputy
Secretary Caroline Forsyth (who heads the disarmament group
at MFAT) told us that Goff had outlined these five areas to
the GOI delegation that visited New Zealand recently, and
none of them balked at the prospect of having to address
these issues at the NSG meeting.

7. (C) Comment. Minister Goff clearly understood the
emphasis the Ambassador placed on the strategic and
historical importance of the US-India deal, and the
possibility of the Indians walking away if the NSG demands
are politically impossible for New Delhi. However, New
Zealand is on the cusp on an election and Phil Goff's party
(Labour) is seriously lagging in the polls. It would be
political suicide for Goff, who is touted as the next Labour
Party leader should Helen Clark lose this election, to appear
soft on a core policy plank for Labour like nonproliferation.
Goff emphasized at the end of our meeting that he would be
meeting later this week with the Prime Minister and the
Cabinet to review this issue. Another factor in Goff's
assessment of the necessity to be tough with India in the NSG
is his experience during the WTO Doha negotiations as Trade
Minister. Goff was clearly frustrated with India and its
adamant refusal to compromise during the recent WTO sessions.
End Comment.
McCORMICK

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