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46–796 CC






OCTOBER 7, 1997

Printed for the use of the Committee on International Relations

BENJAMIN A. GILMAN, New York, Chairman
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HENRY J. HYDE, Illinois
CASS BALLENGER, North Carolina
EDWARD R. ROYCE, California
JAY KIM, California
TOM CAMPBELL, California
JON FOX, Pennsylvania
LINDSEY GRAHAM, South Carolina
ROY BLUNT, Missouri
SAM GEJDENSON, Connecticut
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TOM LANTOS, California
PAT DANNER, Missouri
WALTER CAPPS, California
BRAD SHERMAN, California
BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
JIM DAVIS, Florida
RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff
WALKER ROBERTS, Senior Professional Staff Member
PARKER H. BRENT, Staff Associate
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    Mr. Paul Leventhal, President, Nuclear Control Institute
    Ambassador Robert Gallucci, Dean, School of Foreign Service, Georgetown University
    Mr. Ken Adelman, Former Director, Arms Control and Disarmament Agency
    Ms. Jennifer Weeks, Executive Director, Project on Managing the Atom, J.F.K. School of Government, Harvard University
    Mr. Marvin Fertel, Vice President, Nuclear Energy Institute
    Prepared statement of Mr. Paul Leventhal
    Additional material submitted by Mr. Leventhal
    Prepared statement of Ambassador Robert Gallucci
    Prepared statement of Ms. Jennifer Weeks
    Additional material submitted by Ms. Weeks
    Prepared statement of Mr. Marvin Fertel
    Additional material submitted by Mr. Fertel
    Submission of CRS material by Congressman Benjamin A. Gilman, a Representative in Congress from New York, and Chairman, Committee on International Relations
    Prepared statement of Congressman Doug Bereuter, a Representative in Congress from Nebraska

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House of Representatives,
Committee on International Relations,
Washington, DC.

    The Committee met, pursuant to notice, at 10:04 a.m. in room 2172, Rayburn House Office Building, Hon. Benjamin A. Gilman (chairman of the Committee) presiding.
    Chairman GILMAN. Our hearing will come to order. I want to welcome our witnesses who are here to testify on our U.S.-China nuclear commerce and prospects for implementation of the 1985 U.S.-China Nuclear Cooperation Agreement.
    Our witnesses today are Paul Leventhal, President, Nuclear Control Institute. Welcome. Ambassador Robert Gallucci, Dean of the Georgetown University School of Foreign Service and former State Department official. Welcome, Dean. Ken Adelman, Executive Vice President of Commodore Applied Technologies and former Director of the Arms Control and Disarmament Agency and also wore many other hats in the past. We are pleased to have worked with Ambassador Adelman. And Ms. Jennifer Weeks, Executive Director of the Project on Managing the Atom at Harvard University, JFK School of Government; and last but not least, Marvin Fertel, Vice President, Nuclear Energy Institute. And we welcome this distinguished panel.
    Before witnesses proceed, allow me just to make a few opening remarks.
    We stand at a critical juncture with respect to U.S. nonproliferation policy toward China. Implementing a nuclear cooperation agreement is not a step to be taken lightly with any nation and with the Peoples Republic of China, it is vital that we do it in a proper manner. The Administration has argued that implementation of this agreement provides us leverage with the Chinese. Such an argument does have merit. I don't oppose nuclear commerce with China, and I recognize that there is a limited window of opportunity; however, I consider the window to be a little more open than does the Administration.
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    A decision of this magnitude should not be driven by the desire of an Administration to have a successful summit. There is time to do the right thing. There is time to persuade China to strengthen its nuclear nonproliferation efforts.
    Administration officials have stated that no final decision has been made on whether the President will announce the implementation of this nuclear cooperation agreement at the upcoming summit.
    Implementation of this agreement may be the centerpiece of the summit, yet barely 3 weeks before the event, Administration officials have said they are not sure whether they can meet the certifications required under the 1985 law. If that be so, it means that the Chinese have not said the right things as regards their policy on nonproliferation.
    Given China's record in refusing to own up to its past proliferation record and its outright violation of specific assurances to us, it is deeply disturbing that so close to the summit, the Chinese are not even saying the right things to our Administration. On the other hand, if the Administration is refusing to lay out its objectives for this summit in order to avoid criticism, they are misleading the sentiment of the Congress.
    This agreement involves U.S. national security. It deserves and will receive scrutiny, and while the jury may still be out on whether this agreement can be implemented, it is clear that the President may proceed as he wishes. It should be equally clear that there are legislative options available to the Congress.
    Industry's views are certainly well known, and they have their allies in the Administration. However, at this point, I have yet to hear from a single nonproliferation expert outside the Administration who endorses implementation at this time. Perhaps that may change today.
    Permit me to spell out our own criteria for assessing whether we should proceed with this accord. First, as I have stated previously, the Administration must keep the Congress apprised of its intentions with regard to the agreement. I have urged the Administration to regularly brief the Committee, to lay out the Administration's rationale for implementing this agreement before the summit and in open session. We have met in closed session, we are trying to work out a suitable date for such a hearing; the Administration has been working with us in good faith in that regard.
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    Second, in order to implement the agreement, the Administration must make the required certification of report; pursuant to the 1985 law, that certification must stand on its own. The Administration must adhere to the letter of the law. In part, the purpose of today's hearing is to lay out what is required in that certification and to hear the opinions of our witnesses as to whether the Administration can meet those tests.
    And third, the Administration needs to convince the Congress that the time has come to change its status quo with regard to nuclear cooperation with China. And in that regard, it is not only China's nuclear nonproliferation record that is on trial. Clearly, we need to be assured that China's adhering to international nuclear nonproliferation norms, both in terms of explaining its past behavior and why its future behavior may be different. Members must be convinced that China has stopped assisting Pakistan's nuclear weapons procurement program and Iran's effort to develop an indigenous nuclear weapons capability. However, our Members also need to know that China is engaging in responsible nonproliferation behavior across the board, including all weapons of mass destruction and conventional weapons. That, to my mind, is what the political and substantive debate will be about here in the Congress.
    In addition, in passing judgment on whether we should engage in nuclear cooperation with the Chinese, the Congress needs to know exactly what assurances and commitments the Chinese have provided as we move toward the summit. They badly want nuclear goods and technology and that is our leverage and we should make the most of it.
    Let us not set the bar too low. At a minimum, we should require the following. First, China must join the Nuclear Suppliers Group. Second, China must cease proliferation of all weapons of mass destruction, including missile, chemical, and biological weapons. And, third, China must follow through with its promise to implement an export control system.
    Are there any Members seeking recognition?
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    Mr. Bereuter.
    Mr. BEREUTER. Thank you. I think the hearing obviously is very important. I look forward to the testimony of our witnesses.
    Thank you, Mr. Chairman.
    Chairman GILMAN. Mr. Graham.
    Mr. GRAHAM. I would like to echo that sentiment.
    I represent the Savannah River site, Mr. Chairman, which deals greatly with nuclear issues, and I agree with what the Chairman has said about what Congress needs to be informed of and persuaded about.
    But I just want to put this hearing in context. China possesses nuclear reactors. They are buying them now from the Russians, from the Canadians, from the French, they are building one themselves; so this hearing has to be, I think, held in the light of reality, and I am very interested in what the Administration's views are after they meet with the Chinese. But my inclination is that we need to get engaged in as many positive ways as we can with the Chinese and that the conditions that we are asking China to comply with beyond the agreement make some sense, but there have to be limits on what we ask the Chinese in terms of making sure this happens and with that I am looking forward to hearing the testimony.
    Chairman GILMAN. Thank you, Mr. Graham.
    Mr. Salmon.
    Mr. SALMON. Mr. Chairman, I just look forward to hearing the witnesses. Thank you.
    Chairman GILMAN. Thank you.
    I have before me a CRS report prepared by Shirley Kan, entitled ''China's Compliance with International Arms Control Agreements.'' I think it is a good summary of China's nonproliferation record. I ask unanimous consent to include it as part of today's record. Without objection, so ordered.
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    [The information referred to appears in the appendix.]
    Chairman GILMAN. Our first witness is Mr. Leventhal. Mr. Leventhal founded the Nuclear Control Institute in 1981, and serves as president after having held senior staff positions in the U.S. Senate on nuclear power and proliferation issues. The institute monitors civil and military nuclear programs worldwide and pursues strategies for holding the spread and reversing the growth of nuclear armaments.
    He has prepared several books and lectured in a number of countries on this issue, and he is the Distinguished Visiting Fellow at Cambridge University's Global Security program.
    Mr. Leventhal served as Special Counsel to the Senate Government Operations Committee and was a staff director of the Senate Nuclear Regulatory Committee. He was a Research Fellow at Harvard, and he came to Washington as Press Secretary for Senator Javits a number of years ago.
    Mr. Leventhal, you may read your full statement or summarize it—we will make the statement part of the record—whichever you may deem appropriate.

    Mr. LEVENTHAL. Thank you, Mr. Chairman. My statement is rather extensive, so I will summarize it in about 10 minutes' time.
    Chairman GILMAN. Without objection, the full statement will be made a part of the record.
    Mr. LEVENTHAL. There are a number of attachments which I would appreciate being inserted in the record.
    Chairman GILMAN. Without objection.
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    Mr. LEVENTHAL. Mr. Chairman, I have been involved in a number of nuclear reform initiatives while working on Capitol Hill, particularly the ''fissioning'' of the Atomic Energy Commission in 1974 into separate and independent regulatory and promotional agencies. I did the preparatory work legislation that became the Nuclear Nonproliferation Act, and also handled the ''lessons-learned'' legislation following the Senate investigation of the Three Mile Island accident. And I regard the current situation in deciding whether the U.S.-China Nuclear Cooperation Agreement can be activated at this time to be a part of the whole reform process, and surely a test of whether U.S. nonproliferation law and policy is working in a very difficult situation.
    As you know, Mr. Chairman, the U.S.-China nuclear agreement has been a work in progress since 1985, and Congress allowed the agreement to come into force technically, even though a number of its provisions vary from U.S. legal and policy requirements, but Congress established conditions for the activation of the agreement which no President, to this day, has been able to meet. And the reason for that, Mr. Chairman, is that neither President Reagan, Bush nor Clinton has been able to make the congressionally required certification of China's nonproliferation credentials. Since 1985, China has provided Algeria, Iran, Iraq and Pakistan with nuclear assistance applicable to the manufacture of nuclear weapons. And the question that we face today in 1997 is essentially the same as it was in 1985, as expressed by a State Department official to the New York Times. At that time, the question is whether a nonproliferation guarantee from the Chinese means the same thing to them as it does to us.
    The Reagan Administration, after a number of false starts at getting a clear guarantee from the Chinese leadership finally thought they had one from then Vice Premier Li Peng, who said, and I quote, ''China has no intention either at the present or in the future to help non-nuclear countries develop nuclear weapons.'' And on the basis of that and other assurances, the negotiator of the agreement at that time, Ambassador at Large Richard Kennedy, reported in testimony to this Committee, and I quote, ''Our contacts with the Chinese have demonstrated clearly that they appreciate the importance we attach to nonproliferation. We are satisfied that the policies they have adopted are consistent with our own basic views. Formalizing our ties in the peaceful uses of nuclear energy through an agreement for cooperation will provide a means to advance our shared objectives.''
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    But China, in fact, did not stop its proliferating ways when it signed the agreement in 1985 and indeed, China had contracted to provide an unsafeguarded plutonium production reactor to Algeria and had begun construction of the then-secret facility at the very time China was negotiating its signing of this very agreement that you are now reconsidering today.
    The Clinton Administration appears to be preparing a defense similar to the one the Reagan Administration prepared, and on the basis of commitments that presumably will allow the President to certify, as required by law—and the law in this case is a combination of the conditions in the resolution of approval of 1985 and a further elaboration of those conditions in the Tiananmen Square legislation of 1990; and the key finding is, and I quote, ''China has provided clear and unequivocal assurances to the United States that it is not assisting and will not assist any non-nuclear weapons State, either directly or indirectly, in acquiring nuclear explosive devices or the materials and components for such devices.''
    As we know and as you mentioned, Mr. Chairman, the Administration is in intense negotiations with China right now in the hope that the activation of the agreement can become the centerpiece of the upcoming summit between Presidents Clinton and Jiang, and it is clear that industry is lobbying the Administration very hard to activate the agreement so as not to lose out on what they anticipate to be many billions of dollars in reactor sales that might otherwise be lost to the French, the Canadians or other competitors.
    Now, a key problem is that if U.S. trade is to proceed with China, it will do so in the context of a weak and deeply flawed agreement, one that was negotiated a decade ago under difficult circumstances. Specifically, the agreement does not provide the safeguard requirements on U.S. nuclear transfers found in all other U.S. nuclear cooperation agreements, including those with nuclear weapons States, and it does not assert the U.S. prerogatives to withhold consent for the separation and use of plutonium from U.S.-supplied fuel. So the agreement fails to come to grips with the need for effective internal controls over transferred U.S. nuclear reactors and fuel inside China, and it also does not address at all the need for external controls over Chinese nuclear transfers to other nations, other than retransfer of items that the United States would supply to China.
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    Now, fortunately, the Congress established a means to resolve a core concern about China's nuclear export policy, and that concern goes to the fact that China refuses to require recipients of its nuclear transfers to open their entire nuclear program to international inspections and audits, so-called ''full-scope safeguards'', so in our view, the President should not certify China's nonproliferation credentials and thereby authorize trade with China until China agrees to require full-scope safeguards. And I was pleased, Mr. Chairman, you mentioned that as one of the items you are going to be watching closely in your discussions with the Administration.
    Now, the significance of full-scope safeguards, the importance of it, is made clear in the present situation with Pakistan. And in the situation of Pakistan, China supplies Pakistan material for a safeguarded facility, one that Pakistan has agreed to allow the IAEA to audit, namely the Kanupp power reactor, which was originally exported by Canada. But there exist unsafeguarded facilities in Pakistan, indeed, one that was constructed primarily by China for Pakistan, and that is a nearly complete plutonium production reactor at Khushab.
    Now, apparently the United States has obtained a commitment from China not to supply the heavy water necessary to start up this unsafeguarded plutonium production reactor, but our own research indicates that China may knowingly today be supplying more heavy water to the safeguarded reactor than is needed to make up processing losses and thereby creating a surplus of that material which is vulnerable to a diversion by Pakistan to the unsafeguarded facility. Experts we consulted have grave doubts that the International Atomic Energy Agency inspectors would be able to detect that kind of a diversion. It is our understanding the plant needs 5 to 15 tons of heavy water to start up. I am talking about the unsafeguarded reactor, and China today may be providing Pakistan with about 4 tons a year more heavy water than it needs to run the power reactor. So this is one issue that ought to be looked at closely, and it illustrates the importance of the United States insisting China subscribe to full-scope safeguards in terms of its own export policies.
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    The other matter of immediate concern is Iran, and again, Mr. Chairman, you covered that quite well. It may be that the Administration is able to obtain concessions from China not to supply two power reactors as planned, not to proceed with a uranium conversion plant export that would permit Pakistan to convert uranium gas into a metal form, an essential step for making weapons.
    But the issue remains, what ongoing assistance will continue, and there the Administration may not be as forthcoming, but I think it is important that it be stated for the public record what ongoing assistance there is between China and Iran; and our view is that all such assistance should cease before the President is able to certify that China has met the requirements of law.
    I would like to make special note of the significance of the potential plutonium program in China. When the agreement for cooperation was negotiated, the Reagan Administration explained the lack of a firm commitment to the application of safeguards by China on U.S.-supplied material, and also that it was not asserting the consent rights that the United States, under its own law, has the right to assert over whether or not China would reprocess U.S.-supplied fuel and extract plutonium. One of the arguments in defense of this position is that China is a nuclear weapons State, the low-enriched uranium we are supplying is not a direct-use weapons material, and therefore, the fact that the traditional safeguards arrangements are not in place is not a matter of concern.
    Even if one subscribes to that explanation, the same rationale cannot apply to plutonium that China would separate from U.S.-supplied fuel because that is a direct-use material and is susceptible to diversion to a weapons program and could be a source of plutonium to the Chinese weapons program. So we would argue that the safeguards and consent rights arrangements are still weak and that it is necessary for Congress to press the Administration on getting some concessions from China, both with regard to safeguards and plutonium.
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    Now, it may seem old fashioned in contemporary nonproliferation policy to be concerned about the closing of the fuel cycle and the bringing into being, many, many tons of weapons-usable plutonium, but we would argue, this is a matter of continuing concern; and what plagues the entire nonproliferation program of the United States is the acquiescence of this Administration, and previous administrations since the Carter Administration, to the sheer folly of promoting peaceful applications of atomic energy with atom bomb material as fuel.
    I would simply add, before I close on this point, that China itself might have an interest in not going down the plutonium path because it is extremely expensive and hard to manage, and therefore, may not make commercial sense; but beyond that, China is concerned about the military potential of both the Japanese and the Indian programs where tons of plutonium are being stockpiled. So China may find it in its own interest not to engage in reprocessing, and also, to perhaps join in an effort to seek a cutoff of fissile material that includes civilian as well as military; and therefore, the Administration should be pursuing that.
    I would just like to go now to my conclusion and indicate our recommendations for what the Congress should be doing at this point in time.
    If President Clinton decides at this time that he can certify China pursuant to the law, we would still argue that even with the export control system that China has now apparently put in place, and with the commitments that it has apparently made with regard to Iran, one still has to be very nervous about whether we know everything that China is actually doing and will be doing; and I would cite, again, Ambassador Kennedy's testimony that came immediately before the U.S. learning of an unsafeguarded reactor being sent to Algeria. Therefore, we would recommend that a decent interval be legislated by Congress, specifically, that no commerce would go forward under the agreement after certification by the President for a period of at least 1 year, and then at any point after that, when there is an application to the NRC for an export license or to DOE for approval for transfers and retransfers to China, that the President should be required to recertify his original certifications that activated the agreement, and that that recertification should lie before Congress for 30 days before any export license could be approved, or any approval by the Department of Energy. That would permit Congress to maintain effective oversight, and it would have the additional beneficial effect of putting China on notice that its activities will be followed very closely by both the Congress and the executive branch, and that recertification of its nonproliferation credentials will be required before any major transfer goes forward under the agreement.
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    That is a summary of my testimony. I would just like to note that both we and a group of nine public interest organizations have written to the President. I have submitted that letter for the record, the letter lays out a number of the concerns that I just spelled out here.
    Thank you, Mr. Chairman.
    Chairman GILMAN. Thank you, Mr. Leventhal, and that will be made part of the record.
    [The prepared statement and the abovementioned letter of Mr. Leventhal appear in the appendix.]
    Chairman GILMAN. Our next witness is Robert Gallucci, Dean of the School of Foreign Service at Georgetown University. Robert Gallucci began as Dean back in 1996. He just completed 21 years of government service, serving since August 1994 with the Department of State as Ambassador at large; and from 1992 to 1994 he was Assistant Secretary of State for Political-Military Affairs. Dr. Gallucci returned to Washington in February 1992 to be the Senior Coordinator responsible for nonproliferation and nuclear safety initiatives in the former Soviet Union, and prior to his return, since creation in April 1991, as Deputy Executive Chairman of the U.N. Special Commission overseeing the disarmament of Iraq.
    Dr. Gallucci began his foreign affairs career with the Arms Control and Disarmament Agency in 1974, and he has authored a number of publications on political-military issues, including Neither Peace nor Honor: The Politics of American Military Policy in Vietnam; and he has received the Department of the Army's Outstanding Civilian Service Award.
    Dean Gallucci, you may proceed to read your full statement or summarize it, and we would hope that you would be brief, since we have three other witnesses, and I know my colleagues would like to engage in an exchange.
    Dean Gallucci.
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    Mr. GALLUCCI. Thank you, Mr. Chairman. Thank you for the opportunity to be here today. With your permission, I would like to summit a written statement for the record.
    Chairman GILMAN. Without objection, the full statement will be made a part of the record.
    Mr. GALLUCCI. Mr. Chairman, it seems to me that one way of putting the issue today is to ask ourselves whether it is in the national interest for the President of the United States to seek to implement the 1985 Agreement for Cooperation with China by providing the certifications specified in the legislation. That question, it seems to me, provokes four other questions based upon the debate that I have read and heard, some of it in Mr. Leventhal's testimony.
    The first question is simply, does the evidence support a case that the standard of the legislation has been met? This is the first question. The second is, even if the evidence does support that standard, wouldn't it be wise or prudent or a good idea that we go beyond that standard at this point of maximum leverage to get more in the nuclear area from the Chinese? Third, wholly apart from the nuclear area, should we not insist that the Chinese behavior in other areas of weapons of mass destruction—chemical weapons and ballistic missiles particularly—that that behavior be taken into account as we consider the case for certification? And finally, no matter what one says about those first three questions, why rush to judgment, why act so quickly now, why not wait and let the record build up?
    I think those are how I would divide up the four questions. Let me very briefly address or try to address each one.
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    As Paul Leventhal said, the standard is actually pretty high. Essentially, the President has to certify that China is not assisting any non-nuclear weapons State in acquiring nuclear weapons, and he has to find that there are clear and unequivocal assurances of neither direct nor indirect assistance.
    Now, there is a long unhappy history of Chinese cooperation, at least purported cooperation, with Pakistan's unsafeguarded nuclear program and even reportedly direct assistance to Pakistan in the fabrication of nuclear weapons. In addition, there is evidence, and on the record, of Chinese assistance to Iran or at least agreements to assist Iran in the nuclear area.
    Separating us from this unhappy history are the assurances of about a year and a half ago, May 1996, from the Chinese, that they would essentially do two things: that they would not export to unsafeguarded facilities and that they would put an effective export control system into effect.
    Now, it seems to me that the standard here would have us hold the Chinese to absolutely no assistance to Pakistan's unsafeguarded nuclear activities and no significant nuclear cooperation of any kind, safeguarded or not, with Iran. Whether or not the Chinese meet that standard, I do not know, but those of you with access to intelligence can make that judgment.
    With respect to the question of the export control system, there is, it seems to me, a little ambiguity here because there is the issue of whether the Chinese are going to be held to the Zangger standard or to the Nuclear Suppliers Group standard, and if to the latter, then they must have, in effect, as I understand it, a control on so-called ''dual-use items''. I think we should resolve that issue in our favor and require that the Chinese have in place control of dual-use items if they are to have in place an effective export control system. That is to the first point.
    To the second question, after a judgment is made based on the intelligence of whether they have met that standard, specifically, should we not at this point of maximum leverage insist that the Chinese accept the standard of full-scope safeguards as a condition of supply of nuclear equipment and material to other countries, that the Chinese forego the reprocessing of spent fuel and, therefore, the separation of plutonium in their commercial activities.
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    And, third, should we not press the Chinese to accept IAEA safeguards voluntarily on anything we export to them?
    It seems to me that all three of these standards, or all three of these objectives are very desirable, they are nice to have and I think we ought to seek them; but it does not seem to me that the record supports the conclusion that either they are part of the legislative requirement, the standards set by the Congress, nor are they, to the best of my knowledge, provisions that we have sought in past negotiations over the last couple of years with the Chinese. Thus, I would conclude that if we were to do this now, we would simply be trying to take advantage of a certain leverage, which we may or may not have. We would be raising the bar or moving the goal post, and I don't think that is the way the United States of America should behave in a negotiation; I think it undermines us, and I would not think it a good idea.
    The last point I will make about this—provisions, I think, which are in fact attainable over time. I think that the Chinese can be drawn into the Nuclear Suppliers Group, I think they can be drawn further into the international nonproliferation regime; and I think we can achieve all three, but I don't believe they ought to be a condition of implementation.
    On the third question, outside of the nuclear area, with respect to other weapons of mass destruction, what about Chinese behavior in the area of exports of chemical weapons or chemical weapons precursors, or ballistic missiles or ballistic missile components? It seems to me, that here we have a long and unhappy history of bad behavior by the Chinese and, more recently, some good behavior with adherence to the Chemical Weapons Convention and Missile Technology Control Regime.
    I think I would net this out by saying that we ought to have a clear red line drawn with the Chinese, and it ought to be made clear to the Chinese that significant transfers in these areas—chemical weapons, ballistic missiles—behavior, in other words, inconsistent with the regimes, international regimes in the chemical and in the ballistic missile area, would be a basis for denying licenses to the Chinese once an agreement for cooperation was in place.
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    What I am saying, in other words, Mr. Chairman, is, I would not hold up certification in this area unless there were now outstanding issues of transfers by the Chinese in the chemical, ballistic missile or even the biological area—again, a question that one can answer with access to the intelligence, and I cannot.
    If there are no outstanding cases, I would not set this past behavior as an obstacle to certification, but I would certainly use certification in an agreement once implemented as leverage to insist on Chinese good behavior and hold licenses hostage.
    The final question of, why rush to judgment: Why—after such a long history of misbehavior, if I can put it that way, and such a relatively short record of compliance, why make the judgment now that implementation should proceed? It seems to me that this really goes to the heart of the political matter, and you all must answer the question of whether you think it is in the national security interest of the United States, whether it advances our nonproliferation objectives, whether it advances our regional security objectives to be in a position to export nuclear power reactors to China.
    I think you should answer that question more broadly in terms of the national interest. Is it in our national interest? Is it perhaps even useful in terms of our concern about the environment and greenhouse gases to be exporting to China? And I don't think in these terms it is irrelevant to think about the export impact for the United States of being able to sell these reactors.
    If you believe it is in the national interest to be in a position to do so, then I would suggest that we proceed by recognizing that the track record is short and, at this moment, I would say, incomplete, particularly with respect to dual-use export controls. But when it is complete, if the standard has been met, I would not see a reason for waiting; if we implemented the agreement, if the President certified and if the Congress concurred, U.S. companies would be joining Russian, French and Canadian companies that are selling reactors to China. U.S.-Chinese relations, I believe, would improve, and I also would see China as more likely to be drawn further into the web of legitimate relations between sovereign States.
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    Always, we would have the opportunity to refuse to license exports to China under the agreement if their behavior was inconsistent with the standards that have been set.
    Thank you, Mr. Chairman.
    Chairman GILMAN. Thank you, Dean Gallucci.
    [The prepared statement of Mr. Gallucci appears in the appendix.]
    Chairman GILMAN. Our next witness is Kenneth Adelman, Executive Vice President, Commodore Applied Technologies. This position brings Ambassador Adelman full circle since, as President Reagan's arms control director back in the 1980's, he helped draft and introduce a chemical weapons treaty which finally took effect in 1997.
    From 1981 to 1983, Mr. Adelman served as ambassador to the United Nations. With the rank of Ambassador Extraordinaire and Plenipotentiary, he was second in command to Jeane Kirkpatrick and acted as my boss in the United Nations for a short period.
    Mr. Adelman, besides hundreds of articles, has published four major books and he is now doing some teaching along the way.
    We welcome you, Ambassador Adelman, and again you may read the whole statement or put a summary in the record as you see fit; and we hope you will be as brief as possible.

    Mr. ADELMAN. Thank you very much, Mr. Chairman. Let me say it is a pleasure to see you and be back at this Committee. I have many memories of this Committee, testifying a dozen years ago, some of which were pleasurable. But it is wonderful to see you, Mr. Chairman; and I don't know how many witnesses you have that you call your ''boss'' in previous times. I never thought of myself as your boss, but I am flattered by the title.
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    Let me say that you did a wonderful job as public delegate up at the United Nations when we were up there battling the United Nations, battling the Third World, battling the Russians. It was a totally different international era then. It is a real pleasure to be back here.
    I want to congratulate the Committee on addressing this issue, which I think deals with two out of the three most important issues facing U.S. foreign policy today. First, relations with China and how to get China to adopt the international norms and standards that are prevailing today. I don't say ''American norms and standards''; I say the ''international norms and standards''. And this cuts across the board in terms of human rights, in terms of intellectual property, in terms of nonproliferation of chemical weapons, nuclear weapons, of missiles. It has to do with not threatening its neighbors, neighboring entities like Taiwan. It is a whole range of issues on which Chinese behavior has been disappointing at best and deplorable at worst.
    The second out of the three major U.S. foreign policy initiatives or priorities—is, of course, how to deal with the whole question of nonproliferation, how to protect our country against the spread of weapons of mass destruction around the world. This hearing combines two out of those three, and it is quite critical in that regard.
    I come to you as somebody who testified a dozen years ago on behalf of the U.S.-China agreement. I thought at that time it was a very good deal for the United States. I come to you now as somebody who has been disappointed by the results thereof. I do not do that in order to hurt American business abroad; in fact, now I am a newly founded businessman and, therefore, have real business interests and applaud the efforts—especially of the Clinton Administration—to be quite wonderful in promoting U.S. business abroad.
    But I do believe there are higher interests, or at least other interests, of U.S. foreign policies than to push American products and business interests abroad; otherwise, the Secretary of State of the United States of America is going to become nothing more than a foreign minister of many European countries, that is, basically a traveling salesman for that countries' products.
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    Let me make three points. I am sorry I don't have either an extensive testimony to summit to the record or even a summary of the testimony, but I do have three points to bring up. One concerns summits, one concerns the comprehensive strategy of the approach to China, and the third goes to the issue of the nonproliferation and the nuclear issue.
    First, on summits. One of the things I have learned over the years in dealing in international affairs is summits can be very dangerous times. Someone once said a summit is like Cleopatra, a lot of fun to be involved with but quite treacherous when you get into the maneuvers. I have found over the years, especially dealing with the Soviet Union, some of the worst ideas in U.S. foreign policy bubble up and become full bloom in preparation for summits.
    I noticed in articles on the upcoming October 28 summit with the Chinese that the Chinese expect ''concrete results'' from the summit. It is a nice statement. Does that mean the ''concrete results'' have to come from us? Why don't the ''concrete results'' come from the Chinese?
    This idea that in order to make a summit successful, we have to give a gift to the visiting leader in the summit, has proven dangerous over the years. I would think that a visiting Head of State has gift enough in having a State dinner. If not, then give him a little Steuben eagle of the United States or some other gift—maybe Presidential cuff links.
    I am not about to pay in policy for a gift in order to, ''have a successful summit''. And so I would warn against the Chinese expecting that this summit has to have a gift, our gift to them, and for concrete results.
    Second, I have always been struck by the fact that we need to have a strategy in dealing with China, and not a piecemeal approach. The problems of China involve comprehensive problems: They deal with human rights. They deal with Taiwan. They deal with missile proliferation. They deal with nuclear proliferation. They deal with intellectual property.
    All of these have certain things in common—the rule of law and abiding by the prevailing international norms and standards that now, thank God, are found around the world. To have bits of this China policy is really to atomize, to divide, what should be a strategic approach. And lest this be considered unfair for the United States to try, a comprehensive approach, that's been the Chinese approach for a very long time.
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    I remember, as I am sure Brother Gallucci here does, dealing with the Chinese in the 1970's and 1980's. Every time they talked about relations with the Soviet Union, they said, in order to normalize relations, the Soviet Union had to do three things: get the Vietnamese troops out of Cambodia, reduce their 40 divisions along the Chinese border, and get Soviet troops out of Afghanistan; Chinese leaders kept saying it and saying it and saying it for most of a decade.
    If a then-very backwards and poor China could make demands for real results against the mighty Soviet Union in order to, ''normalize relations''—which really didn't have that much to benefit the Soviet Union—then what could the United States of America, the prevailing power in the world in every sense today, do if we had a comprehensive approach with China?
    So I would urge that this Committee look at China in a larger context. I would really think that the considerations of the 1985 nuclear agreement and the acts of Congress, if I may say, tend to parse out the policy related and prevent the Congress from really taking a more comprehensive view.
    The third point, after talking about summits and strategy, concerns Chinese compliance with international standards and norms. The best that can be said is that it is a rocky record, if I can be so kind. Mostly it is a pretty deplorable record.
    I read in the documents supplied to the Committee that the Director of the CIA said 3 months ago that China was, ''the primary source of nuclear-related equipment and technology to Pakistan, and a key supplier to Iran during the last half of 1996.'' Now this is not a very long time ago. These are quite serious charges, or quite serious findings——
    Mr. BERMAN. Could you just repeat that?
    Mr. ADELMAN. The CIA Director said 3 months ago, that China was, ''the primary source of nuclear-related equipment and technology to Pakistan and the key supplier to Iran during the second half of 1996.''
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    Mr. BERMAN. Key supplier of what to Iran?
    Mr. ADELMAN. Key supplier—I don't know; that is the quote. I would imagine the nuclear supplier to Iran in 1996, the second half.
    So that is relatively recent. It is quite a firm statement from the Director of the CIA. Anybody who tries to do the dance about how China has been behaving of late, in the last few years, would have to do a very nimble dance in order to persuade anybody that their record is very good.
    Let me, in closing, say that I came to this Committee to testify a dozen years ago—right after I was the Chairman's ''boss''. I came a dozen years ago to say that we should move ahead with the China agreement.
    I based that, as Dr. Samuel Johnson said about second marriages, more on hope than experience.
    After all these years, my hope has dwindled. The experience has saddened me. After a while, we have to admit that it hasn't worked out as we had hoped. The record of the Chinese has not been glorious enough to deserve nuclear normalization in this regard.
    Thank you, Mr. Chairman.
    Chairman GILMAN. Thank you, Ambassador Adelman, and we will make your statement a part of the record without objection.
    Ms. Jennifer Weeks is our next witness, Executive Director of the project of Managing the Atom at the Belfer Center for Science and International Affairs at the John F. Kennedy School of Government. Prior to joining Harvard in 1997, Ms. Weeks directed the Union of Concerned Scientists' Arms Control and International Security program and served as UCS's principal arms control lobbyist on issues including arms proliferation, deep nuclear reductions, and multilateral peacekeeping.
    She has written a number of articles, appeared in publications in many of our major media, and serves on the executive board of Women in International Security and as a member of the Council on Foreign Relations.
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    Ms. Weeks, you may put your full statement in the record and summarize or read the full statement. We hope you would be brief, so we can enter into a dialog. Please proceed, Ms. Weeks.


    Ms. WEEKS. Thank you, Mr. Chairman. I also have worked on Capitol Hill for several years and I know that less is more when people are testifying, so I would like to enter my full statement into the record, along with an article on the Nuclear Cooperation Agreement which I recently published in the journal, ''Arms Control Today''.
    Chairman GILMAN. Without objection.
    Ms. WEEKS. Thank you.
    You have a range of views on certification represented on this panel, and mine is essentially, ''Yes, if''—with a big underline under the ''if''. Implementing nuclear trade with China makes sense if the Administration uses it effectively to improve China's nuclear nonproliferation policy.
    I recommend that the Committee focus on five issues as it looks at the case for certification. The key certification issue is whether China is assisting any non-nuclear States to acquire nuclear explosives or explosive materials, and here I agree with Paul Leventhal and with Ambassador Gallucci that if China cannot completely sever its cooperation with Iran and with Pakistan's unsafeguarded facilities, the United States should not certify. I just don't think there is any room for grayness on this issue.
    The second issue is that we need tangible evidence that the new Chinese export control system is complete and is effective enough to work. The new Chinese export control regulations that were announced last month focus on specialized nuclear technologies; they do not extend to dual-use goods, meaning goods that have both commercial and weapons applications. The Chinese Government issued a directive on dual-use export controls earlier this year, but it is still developing the regulations to control them.
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    I think we learned from Iraq's nuclear weapons program during the Gulf War, which profited from a lot of dual-use technology imports, that you have to have effective controls on dual-use technologies with nuclear weapons applications. Until the Administration can show that China has both the intent and the capability to control all relevant nuclear technologies, I don't think we should certify them.
    Third, Congress should really push the Administration on the issue of where China is going on full-scope safeguards. There has been some discussion of this issue already. China is the only major nuclear supplier country that does not require full-scope safeguards as a condition for exports now. This is not required for certification. The United States has tried to get them to do this, and they have resisted taking the step so far. But I would point out that China has announced that it plans to join the Zangger Committee which regulates exports of nuclear fuel and equipment.
    The Zangger Committee is expected to adopt a full-scope safeguard policy within 3 years, by the NPT prepcom meeting in the year 2000. This has put China on a track to deal with this issue. I don't think the Chinese are stupid; I think they are aware of this. They are hopefully moving in this direction.
    Conceivably, they could block the Zangger Committee from adopting full-scope safeguards because the Committee makes decisions by consensus. But I think it is also possible that once they join the Zangger Committee, they will come under pressure from other countries within the group to adopt the same standards that other countries within the group already uphold. Some countries, including Australia, have already started pushing China on this issue. So I think this is something where we should understand what the Administration strategy is, but I would not necessarily link it to certification now; I am not sure that is the best strategy, and I will come back to this in a minute.
    Fourth, Congress should ask the Administration how it plans to verify that China is using U.S. nuclear exports only for peaceful purposes. As my article in ''Arms Control Today'' discusses, the agreement for cooperation has very vague language on safeguards; it talks about mutually acceptable visits and inspections, but it doesn't really spell out what we are going to do, so I think the Committee should seek a very clear picture from the United States of what we are going to do in terms of inspections, end-use checks, documentation, and how we are going to be sure that they are using U.S. exports for what they are supposed to be used for.
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    Finally, I urge the Committee to look very critically at what kind of trade benefits we will get from nuclear sales to China. I am not inherently against selling nuclear reactors to China. They have enormous energy needs, and are an important market. It would be nice to reduce their greenhouse gas emissions, but even if China increases its current nuclear power tenfold in the next 10 or 15 years, as they expect to, nuclear power will supply a total of about 4 percent of their total energy needs, according to estimates from the Energy Information Administration.
    Three-quarters of China's energy needs will still be met by coal by 2015, so I would not exaggerate the benefits from nuclear exports to China. And I don't think the Committee should overlook the fact that we can sell a lot of other energy technology to China, too; we can sell them clean coal technology, natural gas pipelines, and energy efficiency equipment.
    So there is a much bigger picture here than just nuclear sales. The jobs and the export revenue are significant, and I don't dismiss those, but I don't think they should drive this decision. Congress should look at the timing of this decision critically and should ask whether, if there were not a summit coming up in 2 or 3 weeks, we would be certifying China now. If the answer is no, then which is more important, a successful summit or real progress from China on nuclear nonproliferation?
    I would say that progress on nonproliferation is the right answer. I do also think, though, that there are limits to what the United States can win from China in the context of this decision. Here I agree with Dr. Gallucci that going beyond the legal requirements for certification now—attempting to raise the bar, move the goal post, or whatever sports metaphor you want to use—could make the perfect the enemy of the good.
    I think it will be hard enough for the Administration to get really clear guarantees that China will cease its cooperation with Pakistan and Iran and will beef up its export controls. If we get that, I don't think that we should risk losing that bird in the hand by demanding more things now that we could get in the near future. The United States could lose some very valuable opportunities to work with China on other arms control issues if we move the goal post now.
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    One important issue is that they are going to need our help to build an effective export control system. The Energy Department and the national labs are very interested in working with China on other issues, including improving their security over fissile materials and reducing the use of highly enriched uranium in civilian reactors, which China exports. Chinese officials are interested in working on these issues, but a number of DOE and lab people have told me that the first priority of the Chinese is to implement the nuclear trade agreement, and they use all of those other issues as levers to try to push the United States to take that step.
    Now, this does not mean that we should cut corners on certifying them, but it does suggest that implementing the nuclear trade agreement under the right conditions will open the door to further bilateral cooperation that is very much in our national security interest. I think it will help get our people into China, and build our contacts within the Chinese nuclear complex, and in the long run that will be good for us. We can help build a nonproliferation culture in China and shore up the factions within the Chinese Government that want to improve their nonproliferation policy.
    In conclusion, I recommend that the Committee should work very closely with the Administration over the next several weeks to reach agreement on the areas that are essential and legally required for certification, and I would put the cooperation with Pakistan and Iran and the export control systems at the top of that list. If the Administration cannot provide convincing documentation on these issues, Congress should not support implementing the nuclear trade agreement at this time. If the Administration does meet these criteria, I don't think Congress should try to widen the scope of the decision.
    I do think there is plenty of room for Congress to look at legislation. I am sure that Congress will pass some kind of measure providing its judgment on certification at some point, possibly setting some conditions for the next phase of U.S.-Chinese nuclear negotiations.
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    One idea I raise in my written statement is that Congress might set some kind of deadline of 3 years for China to adopt full-scope safeguards as a condition for exports, since it is part of the Zangger Committee and since the Zangger Committee is on that track. Congress could even impose a requirement that if China does not move along with the rest of the Zangger Committee to adopt full-scope safeguards, we would look at suspending nuclear cooperation. This would set a new goal, and a new timetable, and would give China an incentive to keep making progress.
    I do think, if the Committee really believes the case hasn't been made for certification and the summit is creating an artificial deadline, that it would be legitimate for the Congress to extend the congressional review period from the 30 days of legislative session that are required under current law to a longer period. I agree with you, Mr. Chairman, that this is worth doing right.
    And, finally, it is important to keep the big picture in mind and recall that China has made a lot of progress on nonproliferation. Some of our closest allies, including France and Germany, were considerably further back on the same track a few years ago, and it took us a long time to persuade them to do things like requiring full-scope safeguards for exports and controlling their dual-use exports more tightly. We were persistent in those cases, we worked with them, and it paid off. We should be willing to make the same investment in working with China.
    Thank you.
    Chairman GILMAN. Thank you, Ms. Weeks, for your statement, and we will be pleased to make your full statement part of the record.
    [The prepared statement of Ms. Weeks appears in the appendix.]
    Chairman GILMAN. We now have as our witness, Marvin Fertel, Vice President, Nuclear Infrastructure Support and International Programs at the Nuclear Energy Institute, the industry organization responsible for establishing unified nuclear industry policy. He has had almost 30 years of experience consulting to electric utilities on issues related to designing, siting, licensing and management of fissile nuclear plants.
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    Mr. Fertel has worked in executive positions with organizations such as Ebasco Management Analysis Company, Delian and Tenera. Mr. Fertel has been very active in the issues of nuclear technology.
    Mr. Fertel, you may put your full statement in the record and summarize or read the full statement, but we hope you would be brief so our Members can have a dialog. Please proceed, Mr. Fertel.

    Mr. FERTEL. Thank you, Mr. Chairman. I would like to enter the full statement into the record and I will make a summary statement here, and then hopefully we can indulge in some dialog.
    Chairman GILMAN. Without objection, the full statement will be entered in the record.
    Mr. FERTEL. I would like to first express my gratitude to you, to the Ranking Member, Mr. Hamilton, and to the other Members of this Committee for considering the importance of commercial nuclear cooperation between the United States and China. We certainly appreciate the opportunity to provide the nuclear industry's perspective on issues related to that nuclear cooperation today.
    I find myself in agreement with an awful lot of what my colleagues at the witness table have said today. I think, foremost, when considering a global market for nuclear technology, it is in every country's best interest that the United States implement a strong nuclear nonproliferation relationship with China. An important first step in forging that relationship is negotiating and implementing an agreement for peaceful nuclear cooperation. This agreement provides the framework within which both trade and nonproliferation initiatives can evolve and succeed.
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    It is important to recognize that following the establishment of agreement for cooperation, the United States has extensive export control requirements, and of course, we will continue to pursue both overt and, I am sure, covert intelligence on China's nuclear nonproliferation activities. We believe these systems provide additional substantive safeguards against any misapplication of U.S. technology or other actions by China.
    If the President can certify that China has met congressional conditions for implementing the peaceful Nuclear Cooperation Agreement, we strongly believe it would be in the best interest of the United States and the world for us to begin to participate in that program.
    Improvements, though certainly not perfection, in China's nonproliferation policies over the past few years have brought the prospects for nuclear cooperation closer than ever. And the United States is currently continuing to negotiate with the Chinese Government to fulfill the conditions outlined by Congress to permit peaceful nuclear cooperation.
    We have heard a lot today about the summit and the leverage that maybe we have, and also the fact that maybe the Administration is rushing in haste to deliver. I can only offer the observation that over the last 15 or so months that I have been somewhat actively engaged in this issue in talking with Administration folks, they have emphasized in every interaction I had with them the importance of telling the Chinese from every industry source I could marshal how important it was for the Chinese to do things like implement export controls and other actions, like stopping sales to Iran and to unsafeguarded facilities in Pakistan for the Administration to be able to move forward on this particular activity.
    It is not clear to me that we are rushing in haste. I think the summit may actually have provided some leverage for our negotiators in getting the Chinese to agree to things that maybe henceforth they would not have rushed to agree to, so I think it is a double-edged sword we should keep in mind.
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    However, assuming these negotiations are successful, the industry believes there are significant benefits to the United States from opening trade with China. Among these are assuring that China has the safest nuclear program possible by providing them with access to both our technology and, of equal importance, our expertise. We operate the largest, most successful program in the world. We believe that achieving nuclear nonproliferation goals are enhanced by the interactions; and I think Jennifer pointed to what happens when the community is engaged. And we think that will help in nonproliferation space, that is, once you get over the hurdles of satisfying the specific certification requirements.
    As Ambassador Gallucci mentioned, we think greenhouse gas and other atmospheric emissions will be reduced in China and in the global environment due to a successful China nuclear energy program; and finally we believe that U.S. employment, the U.S. economy and the current balance of trade with China will benefit significantly as a result of commercial nuclear trade.
    Let me put the Chinese commercial nuclear program in perspective. China currently has three operating nuclear plants with a total installed capacity of 2100 megawatts. Two of these plants are French designed, 900-megawatt plants; the other is a 300-megawatt Chinese plant. China is already planning to build or is currently building 4,650 megawatts of new nuclear generating capacity, French, Canadian and Chinese design. China has also indicated its intent to purchase two large nuclear units from Russia.
    Moreover, China has an ambitious program to expand its nuclear energy generating capacity, including plans that have 20,000 megawatts on the grid by 2010, and a total of 50,000 megawatts by 2020; that is the equivalent of two new reactor orders each year.
    So really the relevant question, once we satisfy the certification requirements, is not whether China should develop a nuclear energy program; that question has already been answered. The question is whether the United States should be the only nation in the world that excludes itself from access to the China market.
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    Current U.S. and new U.S. advanced reactor designs represent the best options for the growing Chinese nuclear program. We believe the most effective way to develop a rapidly growing nuclear program like that planned by the Chinese is to use a limited number of standardized reactor designs. This is a model originally developed by the French nuclear program, and one that the U.S. nuclear industry will use as it looks toward future electricity needs.
    From this perspective, the United States should encourage the Chinese to select a few specific reactor designs and to build families of plants using standardized designs. This approach facilitates effective and efficient engineering, procurement, training, quality assurance, maintenance and operations. Of equal importance, it helps them to develop an effective regime for regulating a rapidly growing nuclear program.
    From a nonproliferation perspective, we believe once the congressional requirements for certification are satisfied, opening commercial trade between China and the United States will further enhance achieving U.S. nonproliferation goals. Removing current restrictions against civilian nuclear commerce with China requires the President to provide Congress with the specific certifications and reports related to how well China is satisfying some of the requirements mentioned by my colleagues at the table.
    We in the industry are pleased that China has demonstrated progress in some of these areas and we hope that they make progress on all of them so certification can be made when it is appropriate. Once the Chinese have satisfied the certification conditions imposed by the Congress, we believe fully implementing the Agreement for Cooperation between us and China will contribute to both reinforcement of the existing Chinese nuclear nonproliferation infrastructure and a strengthening of the infrastructure through future commercial, laboratory and governmental interactions.
    I would agree strongly with what Ms. Weeks said. The U.S. nuclear industry is fully committed to ensuring the integrity and effectiveness of the worldwide nuclear nonproliferation regime. Clearly, without an effective nonproliferation regime, the benefits that the uses of peaceful nuclear technology provide society will be curtailed or lost.
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    We believe that the current improvements to China's nuclear nonproliferation system are a direct result of the desire of China to have access to U.S. commercial nuclear technology and to also increase competition among potential suppliers.
    I would agree with Ambassador Adelman that a primary objective is to get China to become part of the international community adopting appropriate norms, and from that perspective, as the nuclear industries in China and the United States begin to work together as partners to further develop their program, we believe the transfer of operating experience in nuclear safety and safeguard cultures will strengthen both the safety and the nuclear nonproliferation regimes in China.
    As Ambassador Gallucci mentioned, from an environmental perspective, nuclear technology in China will play a role in protecting the global environment, as that country embarks on a program to develop 500,000 megawatts of electrical generating capacity by 2010, more than double its current electric generating capacity. Nuclear energy will be particularly important to serve major coastal metropolitan areas that are located far from China's vast coal resources and that already are experiencing poor air quality.
    I think, as Ms. Weeks pointed out, from a U.S. standpoint, selling any sort of power technology to China—it is a major market, it is the largest market in the world; and it is not just nuclear, it is any kind of technology. From an environmental standpoint, the strategic significance of nuclear technology is that they are going to be locating their nuclear plants on coastal sites, located closest to their major urban commercial and industrial development, and that will help them not continue to put out air pollution, besides the fact they have trouble just getting coal to the sites. So it is a strategic location, even though, as pointed out, it is only 4 percent to 5 percent of their electricity supply by the year 2010.
    Nuclear energy already plays an important role in avoiding emissions of all forms of atmospheric pollutants. The generation of electricity by nuclear power produces no greenhouse gases nor any sulfur dioxide or nitrogen oxides. One has only to examine the importance of nuclear energy toward reducing carbon dioxide emissions in the United States to see the benefits. Current U.S. nuclear plants reduced total U.S. carbon dioxide emissions by more than 147 million metric tons of carbon in 1996. Without nuclear energy, the U.S. electric utility annual emissions of carbon dioxide would have been approximately 30 percent higher.
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    Finally, turning to the economic perspective. From a U.S. economic perspective, China represents the largest new electricity market in the world, and the export dollars created by reactor orders are substantial. For example, two new French-designed nuclear power plants being built at Ling Ao are worth $2.7 billion to Framatone. A Canadian nuclear plant order at Qinshan is worth approximately $3 billion to the Canadians.
    Exporting nuclear power plants and related services involve thousands of U.S. jobs and billions of dollars in export value. For every American 1,000-megawatt nuclear unit, we can expect between $1 and $2 billion in exports. Using Department of Commerce conversion ratios, this translates into between 15,000 and 30,000 U.S. jobs. These jobs fall in the professional, higher salary classifications and in specific manufacturing and equipment product areas. China is moving forward with its commercial nuclear program, and these jobs and export dollars will be won or lost over the next few years.
    In addition to the initial export opportunities—and we say ''the next few years'' because we think they are going to settle on standardized families of plants in the next few years, that will lock in the type of reactor designs they will look for, at least for the first round of families.
    In addition to the initial export opportunities, significant jobs and exports are available to provide ongoing plant support services, fuel and other broader program services. Potential exports to China between now and 2010 just for new plants can be as much as $15 billion.
    Clearly, the United States can and should capitalize on this opportunity. The economies of our competitors from France, Canada and even Russia are already benefiting from sales in nuclear technology to China.
    In conclusion, cooperation between the United States and China on commercial nuclear technology cannot and should not proceed until the President has concluded that China has fully met the conditions for certification established by the Congress. Once the certification requirements are satisfied, however, it is in the best interest of the United States to move forward with implementing the agreement with China for nuclear cooperation. The subsequent interactions between U.S. nuclear energy experts and the Chinese can only enhance their understanding of how to develop and operate a safe nuclear energy program and how to further strengthen their nuclear nonproliferation infrastructure. The availability of U.S. technology, as China approaches near-term decisions in standardizing its future nuclear power plant program, provides an opportunity for creating significant jobs in the United States and improving the balance of trade with China.
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    Finally, U.S. nuclear technology would enhance the safety of China's nuclear energy program while realizing critical environmental and clean air benefits.
    Again, thank you, Mr. Chairman, and the Committee for inviting the U.S. industry to participate in this hearing and I look forward to dialog and discussion.
    Chairman GILMAN. Thank you very much, Mr. Fertel.
    [The prepared statement of Mr. Fertel appears in the appendix.]
    Chairman GILMAN. I want to thank our panelists. It has been an excellent panel today, and I know my colleagues have some questions. I will be brief.
    I would like each of our witnesses to address the following query: Do you believe it is in our national security interest to proceed with implementing this agreement at this time?
    I will start with Mr. Leventhal.
    Mr. LEVENTHAL. Mr. Chairman, the answer to that question is, what types of certification findings the President is prepared to make and what the hard evidence is behind them. But as I stated in my initial presentation, I think even under the best of circumstances, one cannot assume on the basis of Presidential certifications that all the problems are over.
    I recall again that in 1985, at the time Congress was approving the agreement that the Administration then had negotiated, China was violating a basic nonproliferation norm by sending an unsafeguarded, potential military production reactor to Algeria without the United States even knowing it.
    So my short answer to your question is that even under the best of circumstances, on the basis of commitments now being made by China, there will not be sufficient confidence to permit the activation of the agreement without continuing concern; and therefore, I hearken back to the proposal I put forward for a staged activation of the agreement, if the President is prepared to make the certifications now, such that trade could not begin for at least a year and then only after recertification by the President, that the original findings he made still hold true.
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    Thank you.
    Chairman GILMAN. Ambassador Gallucci.
    Mr. GALLUCCI. Mr. Chairman, I think the answer to that is, ''yes, if''. And if the President can certify that China is not exporting to unsafeguarded facilities in Pakistan or anywhere else, if he can certify that there is no significant nuclear cooperation of any kind with Iran, and if the Chinese put in place a convincing export control process that includes control of dual-use items, and if there is no outstanding issue over other exports and weapons of mass destruction, particularly chemical and ballistic missiles.
    And with respect to all these ''ifs'', Mr. Chairman, that troubling little quote that Ken Adelman read from the CIA would have to be explained by the Administration as to how, subsequent to the assurances by the Chinese in May 1996, the Chinese still managed to be in compliance. If that explanation can be pulled off by the Administration, then I would say the Administration would be on firm ground to proceed.
    Chairman GILMAN. That is a lot of hurdles and a lot of ifs.
    Mr. GALLUCCI. If we had some ham, we could have ham and eggs, if we had some eggs, Mr. Chairman. There are a lot of ifs there.
    Chairman GILMAN. Thank you.
    Ambassador Adelman.
    Mr. ADELMAN. No.
    Chairman GILMAN. Thank you.
    Ms. Weeks.
    Ms. WEEKS. I would say also the ''yes, if'' answer, and obviously none of us here have access to the current intelligence reports in the state of play, so I want to commend the Committee for engaging so early and looking into these issues because I think you have a big part to play in this.
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    Chairman GILMAN. So your answer to my question is what?
    Ms. WEEKS. Yes, if.
    Chairman GILMAN. And Mr. Fertel.
    Mr. FERTEL. Thank you, Mr. Chairman. My answer is consistent with what I said before: Yes, given that the President can certify to the satisfaction of the Congress.
    Chairman GILMAN. Thank you.
    Mr. Hamilton.
    Mr. HAMILTON. Well, let me join the Chairman in thanking you for the panel discussion. It has really been very good. It is a special pleasure to have the two former ambassadors with us and we welcome them, as well as the other members of the panel.
    I gather that none of you would advise the President today to certify that China is not assisting any non-nuclear weapons State to acquire nuclear weapons. In other words, none of you would say, ''Mr. President, go ahead and certify,'' on the basis of what you know today. Those of you who answered yes, answered yes, if, and the ifs were very significant ifs.
    Mr. GALLUCCI. Mr. Hamilton, if I might, it is an if, but what I understand the Administration has said, notwithstanding this quote, the Administration has said, I believe, that it has no evidence that China has acted in a manner inconsistent with its assurances of May 1996.
    Now I think they have to square that with this little quote here from the Director of Central Intelligence. I am not sure how they do that, but if they can, I am personally unaware of activity inconsistent with that, but that means nothing. The question is what the intelligence shows and what is available to you and the Administration.
    Mr. HAMILTON. And the key is the 1996 agreement for you?
    Mr. GALLUCCI. For me, the key question is, is there a fire wall created by those assurances? And there is a reasonable case to be made that you have essentially a year and a half of behavior by the Chinese consistent with their assurance not to assist unsafeguarded nuclear facilities.
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    Mr. HAMILTON. Let me ask the panel this question. If you look back over the past, I don't know, several years here, what is the trend line in China? I mean, do you see improvement with regard to China's willingness to meet our concerns on nonproliferation, or are they just as bad today as they were 20 years ago or 10 years ago? Is there improvement, in fact, as several of you, I think, indicated?
    Mr. FERTEL. I think I would defer a little bit to the experts here but just from an industry observation, we clearly have seen improvement on just what has been published. I mean, they have become party to the Nuclear Nonproliferation Treaty, which they weren't. They helped us aggressively support indefinite extension of it. They signed the Comprehensive Test Ban Treaty. They signed the Chemical Weapons Convention.
    Just last week they agreed to join the Zangger Committee, and I agree with Jennifer that that will probably lead them down the right road for looking toward full-scope safeguards, and that is something we would like to see down the road. They have published nuclear control regulations. We understand that they are looking at what they can do in the dual-use regulation area. I again would defer to particularly Bob and Ken on this, but my understanding was that 10 years ago they were not wanting to do anything in nuclear nonproliferation.
    Mr. HAMILTON. All of you see some improvement in the record, is that right?
    Mr. ADELMAN. I see some improvement in the diplomatic record.
    Mr. HAMILTON. I understand many of you do not see adequate improvement, but you see some improvement.
    Mr. ADELMAN. In the diplomatic record, which is quite different from the behavior of helping Iran, helping Pakistan.
    Mr. HAMILTON. You don't see any improvement in the nonproliferation area?
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    Mr. ADELMAN. The critical thing is their action. Has their action over the last several years been consistent with their increasing diplomatic pledges to international agreements? The answer to that has to be no. As the diplomatic agreements go up, their behavior is still quite spotty and in some respects, quite deplorable.
    Mr. HAMILTON. Mr. Leventhal.
    Mr. LEVENTHAL. I would just make the point, it is the difference between the question of what they say and what they do, and clearly they are subscribing and adhering to more of the international norms and the international treaty arrangements. I do not subscribe to the notion that simply by joining the Zangger group, that it is inevitable they will accept full-scope safeguards. I think it is equally plausible they may withhold their vote and thereby block consensus for the Zangger group doing what all the parties to the NPT, including China, committed to at the extension of the treaty, which is to subscribe to the full-scope safeguards principle.
    I think we have to look into why the Chinese refuse to join the Nuclear Suppliers Group. Now some of it has to do with their general reluctance to join Western institutions that they regard as highly discriminatory, but we have to also look at the bottom line as to what the dangers are if they do not actually subscribe to full-scope safeguards by joining the Nuclear Suppliers Group, and their whole relationship with Pakistan is still very much outstanding.
    Mr. ADELMAN. Better behavior might not be good enough. Probably Saddam Hussein's behavior is better over the last year than in previous years, but yet I don't think anybody on the Committee would want to normalize relations with Iraq.
    Mr. HAMILTON. Do we have, and I will conclude with this, Mr. Chairman, do we have any leverage with China because they want to bring into force the 1985 agreement? Does this give us some real leverage with China?
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    Mr. LEVENTHAL. Well, I would hope so, and that is why I propose certain things that are described to the other members of the panel as raising the bar and making perfect the enemy of the good. But in fact the United States has been raising the bar consistently since 1985, and I think the leverage should be applied to the maximum. And whatever we can get at this point should still be subject to conditional approval in the sense that if the President certifies, there ought to be some decent interval of time that will pass to help ensure, to the satisfaction of the executive branch and the Congress, that this time they really mean it.
    Mr. GALLUCCI. If I might, Mr. Hamilton, it seems to me we are on the right track, though I don't think this panel can help you very much with the question of the performance of the Chinese. I think we have an impression that it is clear that it was awful in the past, and I have the impression that it has been better of late, but the precise reading of Chinese behavior is going to have to depend upon the intelligence which I don't think is available to any of us.
    On the second question you ask, though, I find Paul's answer troubling. I don't believe that the United States should behave that way. If we set a standard and the Congress sets a standard and we proceeded in negotiations with the Chinese, we ought to stick to that standard and then, indeed, we should try to go beyond it, but I don't think we should insist and thus change the rules of the game in the middle of the game.
    Chairman GILMAN. The gentleman's time has expired.
    Mr. Graham.
    Mr. LEVENTHAL. I just want to clarify. The point I was making is that the United States demand that China agree not to supply unsafeguarded facilities, the United States demand that China establish an export control system, are not part of the statutory requirements for Presidential certification either. These are things that the U.S. Government felt were necessary for China to demonstrate its nonproliferation credentials.
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    I think full-scope safeguards should be included in that, and I also think real safeguards should be applied to U.S. imports in China, simply because of China's record of diverting non-nuclear items from civilian to military use. We have to approach these things with our eyes open and to say this is raising the bar unreasonably. I think it is not consistent with the ways that the U.S. Government has already raised the bar.
    Chairman GILMAN. The gentleman's time has expired.
    Mr. Graham.
    Mr. GRAHAM. Thank you, Mr. Chairman.
    Regarding the conditions that we would put on the Chinese and the limits that we will some day have to deal with, if we do nothing, if we just continue to drag out this process and never engage the Chinese in terms of a domestic nuclear policy or a peaceful purpose of nuclear energy, where will the Chinese be in the next 20 to 25 years in terms of nuclear capability, and will other countries come in and fill the void?
    Mr. ADELMAN. Let me say, Congressman Graham, I am not for breaking off a dialog with the Chinese, I am not for isolating the Chinese. I am for continuing to work with the Chinese. I am just not for bending the rules that we have established and for giving up what I consider very good leverage to bring the Chinese into the international acceptable norms and standards that are prevailing today.
    Mr. GRAHAM. I share that concern, nor am I for bending the rules, and I would like to extract as much leverage as possible. But having been a lawyer before I got here, one day you got to sit down and do the deal.
    Mr. ADELMAN. But when you were a lawyer, you didn't do deals that weren't good for you to do. You could walk away and tell your client, ''This is a bad deal for you.'' That is the responsibility of the lawyer.
    Mr. GRAHAM. You have to be able to walk away from the table, but if it is in your client's best interest, and I believe it is in our best interest to engage the Chinese in the nuclear arena, to try to get as much control over proliferation as we can. And since they are the world's largest country, it would be good to have a dialog with them that is substantive, and I think the way to do that is to move forward, but my point is as to what point in time do we lose our leverage. If we keep making conditions that are a year delay in conditions that follow forever, that unlike our competitors in this market—Mr. Fertel, maybe you can answer that, at what point in time does the leverage go away simply because the market is being filled?
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    Mr. FERTEL. I think the short answer to your question, Congressman, is that we have already seen the French, the Russians and the Canadians there selling, and they are just licking their chops to keep selling, so it is not like no one is going to sell to the Chinese.
    I think the other thing in this whole dialog that is important, as far as timing, is this concept of families of plants. From a nuclear safety standpoint, we clearly would emphasize, and I think the Chinese appreciate this, that they want to grow their program in families of plants because it is so much better to manage the program from a safety standpoint and manage the regulatory infrastructure as you grow it.
    So as I said earlier, they will choose, sometime in the next few years, some families of plants that will provide the basis for their current evolution, and they will go with a number of units of that type for some period of time and then they will evolve to a new design down the road. So timing is somewhat critical.
    I think the other thing in this whole debate that is important and again I will emphasize, we believe the President should demonstrate to your satisfaction that they have satisfied the certification requirements, no doubt. After that, the agreement does not cause technology to go anywhere, it provides a framework for commerce.
    You can't move anything out of this country without an export license, that is, a license either from the NRC if it is reactor internals and reactor cooling pumps, a license from the Department of Commerce if it is dual use, or a license from the Department of Energy if it is just technology. It doesn't just happen.
    And as far as the concept of trust and verify, there will be a period of years. If for some reason you could move forward in the next 6 months on certification and if U.S. industry was successful in bidding, you would not move technology for a couple of years. It doesn't happen overnight. So I think that there is this period of time.
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    Mr. ADELMAN. I think it would be the worst of all possible outcomes, Congressman Graham, to give the certification and then deny or pull the export license. This notion of nuclear interruptus would be disastrous for American business. That would be worse than just saying no.
    Mr. FERTEL. I think, speaking for American business, at least at this hearing, we would not advocate you pull a license unless the Chinese are doing something egregious, and if they are doing something egregious and inappropriate, you damned well shouldn't issue the license. What would be worse right now, from an industry standpoint, would be to impose new conditions, set a new milestone out there with uncertainty, because then how do the Chinese know and how does U.S. industry know they can sign a contract with any confidence that they can go forward? If there are actions that are inappropriate, well, then, you don't issue the license. That is why we have the export control regime. Why would you even have it if you couldn't exercise it correctly?
    Mr. CHAIRMAN. The gentleman's time has expired.
    Did you want to comment, Mr. Leventhal?
    Mr. LEVENTHAL. I would just add to that, based on what Mr. Fertel said, I think that is a further reason for Congress passing legislation, establishing the basis on which trade could continue if the certification were made. Thereby, China is notified in advance that if the President fails to recertify at the time a license is applied for, that they will not be able to get the assistance, and that would be a further inducement for China to continue on the path that it appears to be in terms of its stated intentions. Unfortunately, their actions do not necessarily reflect their stated intentions, and by the way, intelligence is not necessarily a perfect source of information either, as, again, the Algerian case demonstrated at the time in 1985.
    Chairman GILMAN. Mr. Berman.
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    Mr. BERMAN. Yes, a couple points. First, Mr. Fertel, you talk about the Russians, the Canadians, the French, they will be there. If the Chinese seem to have a high interest in our certification, I would assume it is because they either want the U.S. competition in the mix or think the U.S. suppliers are more reliable, better, whatever. Is that a fair conclusion?
    Mr. FERTEL. I think that is accurate, Congressman Berman.
    Mr. BERMAN. If that is accurate, then one would think we have some leverage to expect the Chinese to comply with reasonable norms of behavior in order to get the advantage of the benefits of the U.S. industry being a supplier. Is that fair?
    Mr. FERTEL. I think that is fair and I think that is why we are seeing some of the behavior which has been positive.
    Mr. BERMAN. Let's talk about the behavior, and I would like to educate myself a little bit here. I am a little confused between unsafeguarded facilities versus fully safeguarded and what the distinction here is. Anything to Pakistan, a non-signer, in the area of nuclear, should that disqualify China from being certified?
    Mr. FERTEL. My understanding is that since the ring magnet incident——
    Mr. BERMAN. I am not asking what has happened; I am asking what the standard is.
    Mr. FERTEL. I think the standard is they should not send any of their technology to Pakistan that goes to an unsafeguarded facility. And my understanding, again, is they are adhering to that particular standard.
    Ms. WEEKS. Congressman, Pakistan has some nuclear facilities that are safeguarded because the countries they bought those specific facilities from required them to accept IAEA inspections at those facilities. They have others that are not safeguarded because they are not a member of the NPT and have not opened their entire nuclear complex.
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    Mr. BERMAN. When the Administration says no breaches since May 1996, are they saying no exports of nuclear technology to unsafeguarded facilities in Pakistan?
    Ms. WEEKS. That is right, yes.
    Mr. FERTEL. That is clearly what they said.
    Ms. WEEKS. Yes. And the Administration is not trying to get China to curb all of its nuclear trade with Pakistan, only to the unsafeguarded facilities. But in Iran—because the Administration believes Iran has a nuclear weapons program—even though Iran has accepted full-scope safeguards, the Administration is pushing China to cut off all of its nuclear commerce with Iran, so they are actually going further in the case of China's relationship with Iran than what is required.
    Mr. BERMAN. There is a certain something funny about that. Both countries, we believe, have nuclear weapons programs. But because Pakistan safeguards some of their facilities and even though Iran supposedly safeguards all their facilities, we are saying nothing to Iran, which I agree with, but we are saying OK to Pakistan?
    Ms. WEEKS. That is right.
    Mr. BERMAN. Now I would like to just, on the export control issue, is it appropriate to say that we should expect of China not merely that they participate in the Zangger group with respect to established nuclear materials and what they are exporting and licensing; but that this dual use, which might deal with sophisticated computers, I assume, and other kinds of issues that could have conceivably a nuclear weapon as well as non-nuclear uses, that China should have an export control system that covered that as well, is that reasonable for us to insist on before we certify?
    Mr. LEVENTHAL. Well, the fact that they have put an export control system in place is all to the good. The question as to whether it is effective or not, whether it is simply a show piece or whether it really has effect is the important question.
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    Mr. BERMAN. That is certainly an important question. The other important question is, should the list include a dual-use list that goes beyond what joining the Zangger group implies?
    Mr. LEVENTHAL. Yes. It should have two things. It should have a dual-use list equivalent to the Nuclear Suppliers Group and it should have a full-scope safeguards requirement.
    Mr. BERMAN. Tell me what that means again, one more time.
    Mr. LEVENTHAL. Full-scope safeguards means a country, and by the way, every major supplier now adheres to this, will not export to any country unless that country agrees to put all of its nuclear facilities under safeguards, so Pakistan would be disqualified and India would be disqualified.
    Mr. BERMAN. Mr. Chairman, one last question. Read the quote one more time from the Director of Intelligence.
    Chairman GILMAN. Well, I have the full quote. The Ambassador had trouble reading it. Last summer the CIA reported, and this is from the CRS report, ''During the last half of 1996, China was the most significant supplier of WMD, weapons of mass destruction, related goods and technology to foreign countries. The Chinese provided a tremendous variety of assistance to both Iran's and Pakistan's ballistic missile programs. China also was the primary source of nuclear-related equipment and technology to Pakistan and a key supplier to Iran during this period. Iran also obtained considerable chemical weapons-related assistance from China in the form of production equipment and technology.''
    Mr. BERMAN. Thank you, Mr. Chairman. I think when you hear that, I do think it would be good in a classified session, we have been having briefings with one and the other, but with our attention deficit disorder problems, to get them both in the same room at the same time might be interesting.
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    Chairman GILMAN. The gentleman's time has expired.
    Mr. Manzullo.
    Mr. ADELMAN. There is no way to square compliance with the quote.
    Mr. MANZULLO. I just had one question, followed by a comment. Last year we fought a war and lost it with Eximbank, which because of Administration policy refused to allow American suppliers to be involved in the Three Gorges project of China, and I don't know how much we raised on that. And now the Canadians are in there just sopping it all up, and there is not one bit of nuclear energy in there. This was the sale of trucks and personal property, generators.
    And now the President is going to have to come back and say, ''Well, you know, we didn't sell the Three Gorges because we had some problems with the environment.'' The project was built anyway. American presence is very limited there.
    And we have seen the same thing taking place in the area of nuclear energy, but now the threshold is a lot heavier because a truck is not a weapon of mass destruction and you can't take a truck and turn it into a fissionable material. So I just, I guess I offer that if there are any Administration people here, that there is absolutely no consistent foreign policy that this Administration has with regard to exports, and that applies to a nuclear issue also.
    Chairman GILMAN. We have 5 minutes remaining for a vote. I am going to ask the panelists to be patient with us. We will go over and vote and continue the panel. Some of our Members have questions.
    With respect to the issue of China's nonproliferation record on their performance, I refer to all memorandums issued by CRS analysts outlining chronology of Chinese weapons-related transfers, and I ask unanimous consent that these be made a part of the record.
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    The Committee stands in recess.
    Mr. BEREUTER. [presiding.] The Committee will resume its proceedings. Chairman Gilman wanted me to proceed. He will be back shortly. Sorry we had to take that break. I know it is undoubtedly difficult for the Committee witnesses.
    Ambassador Gallucci gave us four ''ifs'', and I marked those down. These ''ifs'' relate to Pakistan, Iran, export control process and other outstanding weapons of mass destruction issues. I think that the House and perhaps the Congress will want to express itself on the subject of certification and cooperation with China on nuclear cooperation issues. So I am interested in seeing what this Member, or perhaps this Committee, can responsibly do in framing a resolution which expresses our views to the executive branch. It seems to me that those four ifs can be addressed.
    Mr. Leventhal, you have two suggestions that I have been able to identify clearly. On page 16, you say that the United States ''should include a commitment obtained from China that it will join all other major nuclear exporters by becoming a member of the Nuclear Suppliers Group, or at least by adopting the NSG's requirement of full-scope safeguards and its agreed list of dual-use items for export control.'' And, second, ''a commitment from China to accept safeguards on its nuclear imports from the United States.'' So those could be two more items on which the Congress could express itself.
    I would ask the panel, what beyond that can the Congress responsibly do in expressing its views to the Administration on this issue?
    Mr. ADELMAN. Mr. Chairman, my view is quite clearly to look at the nuclear issue in the larger context of Chinese adherence to a whole host of issues that have to do with conforming to the international standards of today. I know that is beyond the scope of this hearing. But it is really at the heart of the U.S.-Chinese relationship. They can piecemeal us to death.
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    But this idea of a comprehensive approach to China is exactly the approach, as I mentioned to you in the opening, that China used toward the Soviet Union, and I thought with very good effect, from a very poor and powerless base in the 1970's and the 1980's. I would recommend that Congress keep hammering home the point that what is at issue is China's adherence to international norms and standards prevailing today. These are not American dictates. These are generally accepted across the board.
    Mr. BEREUTER. I have been the chairman of the Asia and the Pacific Subcommittee since January 1995, and I will just share with you my frustration on attempting to frame a fairly comprehensive set of policies with respect to the People's Republic of China. In my judgment, in the absence of an explicit, comprehensive statement from the executive branch, I think we have a responsibility. But, any time you attempt to begin to move legislation which might fill that description, you spend most of your time just batting away amendments that are very destructive of our national interest, in my judgment. There is so much frustration bottled up and so many separate agendas here, sometimes having little to do with the foreign policy, that most of my time, frankly, is aimed at stopping legislation which is damaging. I have really no confidence that I can attempt to bring anything that is a comprehensive framework of foreign policy and affecting our relations with China without having it changed beyond the point of recognition.
    Mr. ADELMAN. I would just say to you: Welcome to the NFL. And welcome to the legislative process.
    Mr. BEREUTER. I would like to start out with an easy game. Ms. Weeks, did you want to comment on my basic question and not my frustration here?
    Ms. WEEKS. I am tempted to say I share your pain but that would be a little clichéd. I think you are right to be looking for ways that the Congress can express itself in a substantive way on this issue, and I have two suggestions.
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    One is, I thought Ambassador Gallucci's formulation of how to link China's chemical, biological and missile exports with the nuclear issue was a good one. I don't think we should hold up nuclear certification until we get satisfaction from China on all of those issues, but it certainly would be useful for the Congress to pass language stating very clearly that if China violates its pledges and its commitments on these other areas, that that would be a very significant cause for holding up nuclear licenses.
    I think also the Committee should look at what the opportunities are for joint U.S. work with the Chinese on some of the issues that I mentioned, like building up their export control system. I can give the Committee staff names of people at the national labs who are thinking about where the best areas for U.S.-Chinese cooperation might be, because that is something we can offer to China that is in our interest. They need the help, they need to figure out how to train people to do inspections and end use checks and all the things that go into having a working system, and that is something that we could use as a positive incentive that is good for us too.
    Mr. BEREUTER. Thank you for your suggestions. I appreciate it.
    Anyone else? Mr. Fertel.
    Mr. FERTEL. Sort of going down the same road a bit that Ms. Weeks was going down, I think the Congress could actually do good by maybe encouraging the behavior—and, again, I am hoping that, as Ambassador Adelman said, the diplomatic actions are reflected in the actual behavior—but by encouraging the continued behavior. I think imposing additional requirements may not do as much as emphasizing the fact that the Congress is looking at what is going on between the U.S. and China on nuclear nonproliferation, that they are encouraged by the actions China has taken, that they encourage China to continue to join the world nuclear nonproliferation organizations, that they encourage the United States to do some of the things Ms. Weeks said.
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    And I think, again, I put a lot of stake in the integrity of our process, on our side. And what I gather from some comments made to me, maybe Members of this Committee don't have as much faith in the integrity of the export control process on our side or the implementation of it. Well, if that is the case, then maybe what the Congress wants to do is emphasize to our side to exercise their responsibilities under the law to do what is right.
    Mr. BEREUTER. Our side being who?
    Mr. FERTEL. The U.S. side. I mean, again, I look at the agreement as a necessary but not sufficient condition for trade with China. It provides a framework. You then need to, first of all, win a sale; and the second thing you need to do is get all the licenses and permits to do it, and I would expect if our export control regime works appropriately, any egregious behavior by the Chinese would result in no exports. While from an industry standpoint that is not a desirable outcome, it is certainly more acceptable than violating nonproliferation laws.
    Mr. BEREUTER. Thank you. So you believe we can stop an egregious violation by the licensing procedure?
    Mr. FERTEL. I certainly expect that is the intent of any export control regime, the same way we would expect the Chinese to be able to do that if they saw an egregious behavior by somebody they were exporting to. If we expect them to do it, we sure should be able to do it.
    Mr. BEREUTER. I have one final question before I turn to Mr. Sherman. What would be the reaction to an amendment to the 1985 law which would extend the period on which the certification lies before the Congress from, say, 30 to 90 days, and then has an expedited procedure for consideration of a resolution of disapproval?
    Mr. LEVENTHAL. Mr. Chairman, I think at this point in time, the Congress is not in a position to disapprove the agreement that was approved in 1985. I think what Congress is in a position to do is to establish a process after certification by the President.
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    Mr. BEREUTER. I am talking about a disapproval of the certification.
    Mr. LEVENTHAL. I'm sorry?
    Mr. BEREUTER. I am talking about an amendment which would provide for a disapproval of the certification.
    Mr. LEVENTHAL. Oh, I see. To permit more time than 30 days. Well, I think that might well be useful. Our proposal goes to the question of what happens after certification, but I think allowing Congress more time to consider certification is probably to the good.
    But, again, I would underscore the proposal we made, which is that even after certification, based on whatever intelligence is available at that time, there is still the uncertainty that we know everything that there is to know, or that we can guarantee good behavior on the part of the Chinese in the future, so there needs to be a waiting period. We propose a year after certification before anything can go forward, and then only upon recertification, when there is an export license application or a request for approval to the Department of Energy.
    Mr. BEREUTER. Thank you.
    Ambassador Adelman, given your history and your involvement, I am particularly interested in what your reaction would be.
    Mr. ADELMAN. Mr. Chairman, I would say as a minimum effort, I guess that would be OK. My experience over the years has been that things in Congress don't move at lightning speed. To build in slower devices in Congress is not, you know, in general what the U.S. Government needs for good governing.
    What the U.S. Government needs for good governing is the courage to look at what Chinese behavior has been and to say within 30 days—or if you want to give yourself 90 days I have no problem with that, but in a reasonable amount of time—that theirs is not acceptable behavior.
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    So I don't think that more time is going to solve much. It builds in a natural inclination to take more time, and like I say, the U.S. Government is so slow now on making critical decisions that I am reluctant to say, ''Let's have an amendment to slow things down.'' There is no rush in the U.S. Government. It is just a lack of courage at times.
    Mr. BEREUTER. I have noticed that.
    Mr. Sherman.
    Mr. SHERMAN. Thank you. I think it is wise that we are holding these hearings. China's behavior, whether it is nuclear materials to Pakistan or especially Iran or their ballistic missiles to Syria, poses serious threats not only to U.S. interests but to world peace in general.
    I have one quick factual question that I think any of you can answer and that is, as I understand it, violation or not, decertification under this agreement leads to only one type of sanction, and that is limitation on U.S. exports to China. Is that correct, Ambassador? A simple factual question. If we did not certify China under this agreement, if we found that they were in clear violation, the only sanction would be limitations on U.S. exports.
    Mr. ADELMAN. That is my understanding.
    Mr. LEVENTHAL. But it is a Presidential determination, not a congressional determination.
    Mr. ADELMAN. I think that is right.
    Mr. SHERMAN. And I think Mr. Manzullo pointed out very well our relationship with China is this: If they despoil their environment, we cut off our left hand. If they engage in nuclear proliferation, we cut off our nose. This is not a terribly effective sanction.
    Yes, China would like to have U.S. companies bidding on nuclear projects so that they can buy from France or some other nation that abstains from criticizing their domestic rights policy, but they are going to have some price pressure on other countries they are in fact going to import from. But this is of slight significance as compared to $45 billion worth of goods shipped to the United States.
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    It seems as if our foreign policy laws were written at a time of great arrogance, a belief that we were the only source of certain commodities or technologies and that we would punish other countries by not exporting to them. Those days are gone, and we certainly ought to take a look at stronger sanctions.
    Now I voted to continue Most-Favored-Nation status for 1 year, as the majority of Congress did, in part because we were not offered an alternative of Most-Favored-Nation minus, that is to say, give the effect of Most-Favored-Nation status with some occasional sanction.
    I will tell you this, if we could have Most-Favored-Nation status but a 5 percent tariff on all textiles or shoes coming in from China if China did not cooperate with us on nuclear proliferation issues, we would have a much stronger response, I would think. I would like to hear from the panelists on this. Does the Chinese Government have the capacity to prevent its entities from exporting these devices of mass destruction and related technologies, and would they be more likely to do so if they felt that they would lose a significant portion of the U.S. market?
    Mr. ADELMAN. The general point you bring up, Congressman, on other countries filling in if the United States does not proceed is a very good point. It is a point that applies in the whole field of international relations called the use of sanctions.
    You can always find somebody out there who is going to sell bad things to bad countries, OK? And if your standard is, ''Does everybody comply to the sanctions?'' Your answer is always going to be ''No''. So you will never have any sanctions at all.
    Then, do sanctions help? To look at historical examples, I would say, ''Yes, sanctions do help.'' They help, obviously, to raise the price, raise the difficulty of obtaining some goods.
    The nonproliferation sanctions over the years, despite the leakage, have contributed to the most successful arms control initiative and exercise in history. If you go back to the 1950s' strategic literature, you find article after article predicting a world full of nuclear weapon States in the 1970's.
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    In fact, President John F. Kennedy gave a speech in 1963 in which he said by 1975—which is already 22 years ago—by 1975 there would be 15 to 20 nuclear weapon States. That was not greeted with gasps. That was expected in the literature. We are now 22 years later. We do not have 15 or 20 nuclear weapon States. That is in part because we have had sanctions against those things, despite leakages, despite difficulties we talked about today.
    Mr. SHERMAN. Ambassador, it is very clear that China is a major source of the proliferation of weapons of mass destruction and their delivery systems. It is very clear that they don't fear this act very much at all. It is very clear——
    Mr. ADELMAN. That I don't know. All I know is they keep wanting to talk to our U.S. industry very much about nuclear reactors. Now you can't have it both ways, that it is unimportant to them and they really want U.S. products.
    Mr. SHERMAN. But they really want American companies in there bidding on the projects so they get a better deal from the French. That is important to them. Is it as important as the Nikes sold in L.A. County alone? I don't think so. The French can always provide the nuclear weapons, the French are incapable of wearing as many tennis shoes as we do, and that is the one thing that can't be filled in.
    I don't think it is a coincidence that the one kind of sanction that would be effective against China is the one that none of us are talking about. Instead, we are talking about cutting off our own exports of goods that China would easily obtain elsewhere, perhaps at a slightly higher price.
    Mr. ADELMAN. That the United States traditionally has not been a country like France in terms of export regulations or thrust of our foreign policy. I for one would not want a foreign policy like France's.
    Mr. SHERMAN. I am not suggesting that we reduce the sanctions under this act, I am saying we ought to increase them. Yes, we should limit nuclear technology going to China as long as China is a source of this kind of destabilizing action in the world, but for us to ignore their actions when we buy our tennis shoes is to encourage the same kind of behavior that we have seen over the last several years.
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    Mr. ADELMAN. But there is a qualitative difference between buying Nike tennis shoes and giving them a nuclear plant, isn't there?
    Mr. SHERMAN. No. You buy enough tennis shoes, they can pay the extra 10 or 20 percent the French will charge them for a nuclear reactor.
    Mr. ADELMAN. Well, I would say that most people, if you would ask them, including most experts, ''Is there a qualitative difference between buying tennis shoes and buying a nuclear plant for a few billion dollars?'' Most people would say, ''Yes. There is a big difference.'' I would.
    Mr. FERTEL. I think, Mr. Chairman, that the Chinese clearly are looking at access to the U.S. market to help the competitive situation over there, but I think it goes beyond that. I think that they clearly recognize that U.S. technology in some respects is like the Good Housekeeping seal. You are getting the best technology in the world, you are getting the operating experience that the U.S. brings, and I don't think it is just to be able to lower the French bid. If it was just to be able to lower the French bid, I don't think U.S. industry would be spending as much energy, time and dollars trying to figure out how to sell to China when that market is available.
    Mr. BEREUTER. Mr. Sherman, I think Mr. Leventhal would like to comment.
    Mr. LEVENTHAL. I just have a brief comment on your observation. I think in the context of what you just heard from Ambassador Adelman, I think one of the limitations of U.S. nonproliferation policy is that it is narrowly focused on nuclear assistance, and linkage is a dirty word in the sense of spillover to other matters of bilateral and multilateral interests.
    Therefore, the way the Atomic Energy Act and the Nonproliferation Act are constructed, the leverage that we apply is nuclear leverage, when in fact the more effective leverage might be the sort of thing that you have described. But up to this point there has been no support for broadening the tools and devices and influences that we might have on the nuclear behavior of other countries by having our bilateral and multilateral relations in other areas affected by such behavior, and it might be to the good to consider such an unorthodox approach.
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    I would also just like to make one brief comment on the notion that President Kennedy's original projections were not fulfilled. It is true that there are not the number of declared weapon States in the world that had been anticipated at the time, but we have to keep an eye on the bottom line. And the bottom line in this respect, in my view, at least, is how much atom bomb material there is in the world, particularly material under civilian auspices, and the opportunities that we might expect in the future for rapid conversion of peaceful atom bomb material into military atom bomb material.
    That is why our institute has been steadfast in trying to delegitimize the use of plutonium in civilian programs and delegitimize the use of highly enriched uranium in civilian programs. That might be the ultimate litmus test, because if the world does turn in some unanticipated way, we may find that President Kennedy's prophecy was an under estimate of what the nuclear weapons potential of the world is today.
    That is why in my testimony I underscore the need to engage the Chinese on whether or not they are going to engage in reprocessing and why, and for the United States to assert influence in that respect, both in terms of the adequacy of safeguards on the materials we send them and to try to influence their policy away from the reprocessing of spent fuel and the utilization of plutonium.
    Mr. SHERMAN. One final comment. Yes, there may very well be 10 or 15 nuclear States in the world, albeit 22 years late by that prediction. I would say that it is more likely than not that sometime in the next 50 years an Iranian weapon of mass destruction will kill hundreds of thousands or even millions of people. They may be in Baghdad, they may be in Tel Aviv, or they may be in Los Angeles. If those dead people are in Los Angeles, many of them will die wearing Nike tennis shoes, and for us to say that the $45 billion U.S. import market is somehow sacrosanct and cannot be linked to such mundane matters as the control of nuclear and biological weapons, is tennis shoes-wise and survival-foolish.
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    Mr. ADELMAN. But if that dire prediction, if that calamity were to take place, wouldn't it be regrettable that the United States had anything to do with the nuclear part of that?
    Mr. SHERMAN. You send tens of billions of dollars to China, no strings attached, and then wash your hands of the fact that the uranium was purchased in Europe, and you can build a psychological barrier between one part of your brain and another and say that your billions of dollars had nothing to do with the nuclear program of China and Iran. But the fact of the matter is, if and when access to the U.S. market is contingent upon a responsible nuclear policy, China will reform its nuclear policy. Until then, a continuation of the status quo is demonstrably ineffective. Perhaps the existing statute applied more rigorously will be sufficient, but the only thing we know is sufficient is to limit the access to the U.S. import market.
    Mr. BEREUTER. Thank you, Mr. Sherman. Thank you very much. I ask unanimous consent that my entire opening statement be made a part of the record.
    [The prepared statement of Mr. Bereuter appears in the appendix.]
    Mr. BEREUTER. I will turn now to Mr. Blunt, the gentleman from Missouri, and unless we have other Members coming, you will be the gentleman who has the last questions today.
    Mr. BLUNT. Thank you, Chairman Bereuter. I apologize for being gone. It is one of those normal mornings in Congress. And I may ask questions you have already answered, but this is a significant enough issue that probably the answers could be in the record a couple of times.
    Mr. Leventhal, while I was gone, did you become a ''yes, if''? It sounded like to me on my return that you think that selling this technology might be appropriate if we could get the right kind of agreements in the interim to—I mean, they have the technology anyway, it sounds like to me, from lots of other people.
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    Are you saying that really what we should be holding out here for—and Ambassador Adelman, you may want to comment on this as well—is to try to, as we help their competitive bidding or their move to capitalism or whatever we have been talking about here through nuclear bidding, is what we are really holding out for trying to put some safeguards on the nuclear technology and the nuclear capacity that they already have?
    Mr. LEVENTHAL. I am not a ''yes, if'', I am more a ''yes, but''.
    Mr. BLUNT. Let me get that down. I don't have a category for a ''yes, but''.
    Mr. LEVENTHAL. My own view now is that, given the CIA's judgment as to what Chinese activities were in the second half of 1996, is the President cannot really certify in a way that establishes a high degree of confidence that what China is saying now really means something and that what China is saying now will apply indefinitely into the future.
    So when I say ''yes, but'', it means that if the political reality is such that the President is prepared to certify, and Congress does not have the two-thirds vote in each House to basically override that, then the very least Congress should do is to establish a process that delays the actual startup of trade under the agreement triggered by the President's certification; that there be at least a 1-year delay, and then the President would have to recertify before any license could be issued by the NRC or approval made by DOE. That at least puts China on notice that if the President for whatever reason is prepared to certify today, that they are not home free; that there will be a statutory basis for not permitting that assistance subject to the agreement to go forward, unless there can be a clear record of behavior consistent with the commitments now being made.
    Mr. ADELMAN. I think that would be a perfectly awful solution for Congress, if I may say so with all due respect, Paul. I think to set up a situation where you give the green light now and then pull the plug later on, when their behavior remains fairly consistent over the time, is very harmful to U.S. business, very harmful to U.S. credibility, and probably not doable.
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    If you think you are under a lot of pressure from U.S. business right now, and I think there is a lot of pressure—which I think is absolutely legitimate—one of the functions of the U.S. Government should be to help a U.S. business overseas—and it would be very sad if we lose this opportunity—but if you think you are under a lot of pressure from U.S. businesses now while debating certification—you'll be under more pressure after you give a green light—you have export controls or recertification or another procedure after an American company has won the contract. You are going to have one devil of a time saying we didn't really mean it. I think that kind of nuclear interruptus is, as I say, the worst kind of outcome.
    Mr. LEVENTHAL. Well, maybe you misunderstood my position, Ambassador. My position now is that I don't see how the President can certify.
    Mr. ADELMAN. I think it is pretty straightforward.
    Mr. LEVENTHAL. So in that sense I agree with you. But if in fact the political realities are that Congress cannot stop the certification because of the way the resolution of approval was drafted and approved in 1985, then there should be some additional check. That is all that I am saying, and there is an additional check anyway implicit in the export licensing process, because the commission always has to determine that an export is not inimical to the common defense of security.
    However, that check is rather weak because the President can override that, as President Carter did with regard to the export of low enriched uranium to India for the Tiruppur reactor. So I am simply saying that it is essential that Congress maintain an effective oversight role and that this not be the end of it, if President Clinton is determined to certify today and Congress cannot stop it.
    But I think, and I will reiterate this point, that the Committee, by getting into this situation early, before the certification is made, is in a position to influence the President not to certify if there is any reasonable doubt that the kinds of commitments he is getting now are as good as they sound. And that is the position that I take, that certification should not proceed without the hard evidence, and even if there is hard evidence, you still need a period to test the sincerity and the completeness of the commitments made.
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    Mr. ADELMAN. There is a real danger that things are getting so confused in all this. ''Yes, if''. ''Yes, but''. All this language gets very confusing. If you are a Chinese trying to figure out U.S. foreign policy and you hear these endless phrases without verbs, it sounds almost German; you wonder where the verb is—you get the idea it is very unclear what the hell is going on.
    It is very simple to say the Chinese behavior has not been such to conform with any international norms or what we meant in 1985. Once theirs becomes behavior which conforms in a reasonable way, yes, then we are anxious to sell this material. Then there is no shame about it. I would be very supportive of U.S. business getting these contracts. I don't want the Russians or the French to get these contracts, I want U.S. business to.
    But I also want standards of international behavior. I don't see how, without twisting yourself into a pretzel, you can say there is conformity in this. And twisting yourself into a pretzel is very damaging. Clarity in foreign policy goes a long way.
    Let me give you one example real quick. In 1981–82 the Iran-Iraq war, Iraq used chemical weapons against Iran. OK, your heart doesn't bleed because of these two combatants. But the standard of not using chemical weapons in combat should have been upheld by applying sanctions back then.
    We had the power to impose sanctions on that. We were at that time cozier with Iraq than we were with Iran. The decision was made, and I participated in an NSC meeting in the Reagan Administration on this issue, that because we had so much else going with Iraq at that time we could not apply the sanctions. So let's try to explain that the chemical attacks didn't happen in the last 10 minutes or something like that. My explanation didn't make any common sense, but with a bunch of lawyers, we could do it. But, those kinds of actions signal ''Well, it's OK.'' They are very damaging, I think.
    Mr. BLUNT. You are still a no.
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    Mr. ADELMAN. I am a no.
    Mr. BLUNT. Ms. Weeks, I want to get to you with a question. The Chinese have nuclear facilities, energy facilities now.
    Ms. WEEKS. They have nuclear energy facilities and nuclear weapons, yes.
    Mr. BLUNT. They have technology from France, Canada, made a recent agreement to get it from Russia. Any other countries that have provided that technology?
    Ms. WEEKS. I don't believe so, no. They built one reactor themselves. I think it is a fairly small one and it was an early design. They want to build an increasing percentage of the content of all of the reactors they have planned, and that is going to be the case for whoever they buy them from. They want Chinese engineers and designers to be trained to help build these things and to build an increasing amount of the content themselves.
    Mr. BLUNT. Mr. Fertel, do you want to comment?
    Mr. FERTEL. I just wanted to make the observation that I think all of us on the panel, including Ambassador Gallucci when he was here earlier, made the statement that as far as what would suffice for the certification, none of us were privy to the intelligence information, the deliberations of the negotiations, et cetera. And in the last 10 or 15 minutes both Ambassador Adelman and Paul Leventhal went ahead and said they just would not certify right now based on what they know, and maybe based on what they know, they couldn't certify. I think we need to see what the President knows and what he knows from sources that none of us are privy to, and that is what the Congress should review, not what we conjecture.
    Mr. BLUNT. What is the economic impact, Mr. Fertel, of establishing one nuclear reactor, getting the contract for that in the United States, in terms of dollars or jobs?
    Mr. FERTEL. We looked at that based upon experience with some sales to Taiwan and other sales in South Korea and Japan, and it would look like you are in the $1 to $2 billion range for one reactor, and again, using rough numbers, it is maybe 15,000 man-years of work.
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    We see a market, just to put it in perspective, if the Chinese are going to come anywhere close to meeting their objectives, which is 50,000 megawatts by 2020, they would be ordering about 2,400 megawatts a year starting next year in order to get there. While that sounds like an enormous amount of capacity, since 1990 they have added 100,000 megawatts to their grid, so in 6 years they have added 100,000 megawatts of generating capacity.
    Mr. BLUNT. I am told that General Scowcroft, Brent Scowcroft, has authored a paper on encouraging nuclear cooperation with the Chinese. Does anybody know, does he take a position in that paper on this specific issue?
    Mr. ADELMAN. I don't know that. I just know that Brent Scowcroft over the last 20 years has always, in every decision over China, has always been for it, whatever it is. He is, and this is a perfectly respectable position, he is for more engagement, dialog, constructive engagement. He was with President Bush right after Tiananmen Square on the delegation to China. If I remember right, Brent himself went over to talk to the Chinese about normalizing relations very quickly and dramatically after that. And he is, like I say, in a perfectly respectable position. It is not one I support. When there is a fork in the road, he takes the fork toward China.
    Mr. BLUNT. Does anybody know for sure, does he address this issue?
    Mr. FERTEL. This is the study, and if it is OK with the chairman, we will enter it into the record for this particular Committee hearing.
    Mr. BLUNT. Mr. Chairman, can we have that study in the record?
    Mr. BEREUTER. Without objection, it will be made part of the Committee files. And the last statement of his, the Chairman's statement on General Scowcroft, may go to your question. I am not sure, but I will turn over my copy for you to look at immediately if you would like.
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    Mr. BLUNT. OK. Mr. Chairman, I think I am done.
    Mr. BEREUTER. Thank you. We will go for one final question to Mr. Graham and we will conclude so we can release our witnesses.
    Mr. GRAHAM. Thank you, Mr. Chairman. I would like to talk about reprocessing just for a second.
    Mr. Leventhal, you would like to make one of the conditions for any negotiations or deals with China that they not reprocess spent fuel. Is that correct?
    Mr. LEVENTHAL. That the U.S. attempt to influence China to come to that decision, that is correct.
    Mr. GRAHAM. Of the nuclear nations that have domestic nuclear power plants, do the British reprocess their spent fuel?
    Mr. LEVENTHAL. All of our major trading partners in Europe, Britain, France, the two major trading partners, Britain and France, and Japan, have taken a position somewhat distant from the original U.S. position on reprocessing. They do reprocess.
    Mr. GRAHAM. Would it be fair to say that the norm is, among nuclear users, to reprocess spent fuel?
    Mr. LEVENTHAL. No, not among nuclear users; among principal nuclear vendors, perhaps.
    Mr. GRAHAM. Vendors, that is correct.
    Mr. LEVENTHAL. But a growing number of countries that use nuclear energy to generate electricity are seeking to avoid reprocessing of their spent fuel, because the mock fuel they would have to use is uneconomical and raises the risks unreasonably for the utilization of atomic energy for peaceful purposes.
    Mr. GRAHAM. Thank you.
    Mr. BEREUTER. Ladies and gentlemen, thank you very much for your testimony today. It was very responsive, direct and helpful to us. Thank you very much. This hearing is adjourned.
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    [Whereupon, at 12:50 p.m., the Committee was adjourned.]


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