Hearing of the Senate Foreign Relations Committee - The Civil Nuclear Agreement With China: Balancing The Potential Risks and Rewards

Hearing

Today we begin the exercise of our statutory responsibility -- a responsibility Congress requested -- to review agreements between the United States and foreign nations related to cooperation on civil nuclear programs.

We must examine the political, economic and security aspects of this agreement, weighing the risks and benefits.

In doing so, we must dig beneath the surface of the agreement to expose and thoroughly examine those issues that cause concern in engaging in such an agreement.

We also should consider how this agreement could potentially impact U.S. strategic interests in the Asia-Pacific.

The agreement before us represents a continuation of a relationship that originally began in 1985 with the congressional approval of the "Agreement Between the United States and the People's Republic of China Concerning Peaceful Uses of Nuclear Energy."

It expires on December 30, 2015 and without a new agreement, civil nuclear cooperation will cease.

At the time of submission of the 1985 agreement, China was engaged in activities that caused significant concerns -- related to proliferation, lack of safeguards, lack of export controls -- in Congress and the agreement lacked key assurances to alleviate those concerns.

In passing a joint resolution expressing its approval of the agreement, Congress required several certifications to address its concerns prior to the issuance of any export licenses pursuant to the agreement.

The challenges in the relationship with China, and its actions relevant to the required certifications, were such that certifications could not/were not made by the administration until 1998 -- 13 years after the agreement originally entered into force.

Some of those concerns still exist, maybe to lesser degrees, but they still exist.

The agreement before us now continues civil nuclear cooperation for another 30 years.

I am glad the administration chose to hear the concerns raised by this committee last year about civil nuclear agreements that extended in perpetuity, including a termination of this agreement after 30 years.

It is right that agreements of this consequence should be periodically reviewed by Congress to ensure they continue to be in the national interest.

Notably, and not present in the current agreement, the U.S. provides advance consent to enrich U.S.-supplied uranium up to 20 percent U-235 and to reprocess U.S.-obligated material.

I'm sure I'm not alone in questioning this change in the relationship.

I hope that the administration can adequately explain why it is in the U.S. interest to allow for this type of activity using U.S.-supplied or obligated material.

The president's transmission letter to Congress states that this agreement is "based on mutual commitment to nuclear nonproliferation," but I have misgivings. The commitment may not be so mutual.

It will be incumbent upon the administration to expediently allay concerns raised by our members.

The Nonproliferation Assessment Statement (NPAS), required to be submitted to Congress with the agreement, identifies several potential issues of concern.

According to the NPAS, "China's strategy for strengthening its military involves the acquisition of foreign technology as well as greater civil-military integration, and both elements have the potential to decrease development costs and to accelerate military modernization. This strategy requires close scrutiny of all end users of U.S. technology under the proposed Agreement."

Further, the NPAS says, "China's provision to Pakistan of reactors beyond Chasma I and II is inconsistent with Chinese commitments made when it joined the NSG (Nuclear Supplier Group) in 2004."

Finally, according to the NPAS, China updated its regulations and "improved actions in some areas" but proliferation involving Chinese "entities" remains of concern. State Owned Enterprises (SOEs) and individuals have been sanctioned by the U.S. on several occasions for transferring proliferation sensitive dual-use materials and technologies.

Congress should also consider China's record as it related to missile proliferation.

The 2011 Director of National Intelligence Worldwide Threat Assessment said, "North Korea and entities in Russia and China continue to sell technologies and components in the Middle East and South Asia that are dual use and could support WMD and missile programs."

The 2014 State Department Compliance Report said, "In 2013, Chinese entities continued to supply missile programs in countries of concern. The United States notes that China made a public commitment in November 2000 not to assist 'in any way, any country in the development of ballistic missiles that can be used to deliver nuclear weapons.'"

Concerns persist about Chinese willingness and ability to detect and prevent illicit transfers. I would like the administration to specifically address why Congress should feel confident that China will prevent illicit transfers going forward.

Concerns aside, the U.S. has realized benefits from the current agreement.

Economic benefits include an $8 billion sale of four reactors by Westinghouse in 2007, still under construction today.

We are also gaining valuable insight from lessons learned in the construction of the AP1000 reactors that will cause domestic construction to be more efficient, timely and cost less.

China has also developed and articulated stronger nonproliferation policies and export control regulations.

It will now be up to Congress to determine if the concerns about the agreement are outweighed by the benefits.

If so, we should approve the agreement without delay.

If not, but the concerns can be mitigated, we should work diligently to find grounds upon which we can support the agreement.

If the concerns cannot be alleviated, we should disapprove the agreement.

All this is to say that we have a difficult task ahead of us, but one that I know we can approach seriously and with the best political, economic and security interests of the United States in mind.

I thank our witnesses for joining us today to begin this examination and look forward to working with them and their colleagues in the weeks ahead of us.

Source