Washington: The US has trumpeted a nuclear cooperation deal with India as the cornerstone of strong new ties with a growing economic and strategic force in Asia. But with talks on that deal stalled and India and both sides trading blame for a breakdown in world trade negotiations, tension is creeping into the relationship.
In reaching a preliminary nuclear agreement, and persuading the US Congress to approve it, the Bush administration scored a rare foreign policy success last year at a time when it faced growing criticism over the Iraq war.
On 27 June, US Secretary of State Condoleezza Rice stressed the urgency of not letting the deal fall through.
“I cannot tell you how much the world is watching to see if we can complete this,” Rice said in a speech to the US-India Business Council. “We need to get it done by the end of the year.”
After years of viewing each other with wariness, the two countries are cooperating in unprecedented ways: environment, education, defense, energy, business and security issues.
But it is the proposal to ship US civil nuclear fuel to India that both countries’ governments have chosen to cast as, in Rice’s words, “the first fundamental pillar” of the emerging partnership.
The accord cleared a major hurdle in December when President George W. Bush signed a congressionally approved exception to US law to allow civil nuclear cooperation.
But the countries still must settle technical negotiations on an overall cooperation plan, and those talks have sparked frustration on both sides.
One of the biggest sticking points has been American reluctance to allow India to reprocess spent atomic fuel, a crucial step in making weapons-grade nuclear materiel.
“Had this been easy, it would have been done a long time ago,” Rice said. But, she added, “both sides have determined that it is worth it.”
Sandra Polaski, a trade analyst at the Carnegie Endowment for International Peace, said India, while keen to strengthen ties with the US, wants its interests served, both in the nuclear deal and in the global trade talks involving the WTO.
“The Indians are making it very clear that this is not going to be a relationship of unequals,” Polaski said.
Analysts say that early, glowing rhetoric from both countries’ leaders led many to believe that the nuclear accord would be settled easily. Both countries also portrayed the nuclear deal as the foundation of growing cooperation.
Robert Einhorn, a former US assistant secretary of state for nonproliferation, asked: “Why take the single most controversial issue and make it the centerpiece of your engagement strategy?”
Failure in the nuclear talks, he said, would be a setback but only a temporary one because of the deepening connections between citizens and governments in the two countries.
“In the next couple of months, we’ll see if this India-US civil nuclear deal will fly or not. The window is closing in terms of the opportunity to do this,” said Einhorn, now an analyst at the Center for Strategic and International Studies.
Rice also said in her speech that it would be a “tragedy and a true shame” if India and the US did not do more to push ahead WTO talks, embroiled in a six-year logjam between rich and poor countries over eliminating barriers to trade in farm produce and manufactured goods.
Brazil and India criticize the US for its failure to offer deep enough cuts in the billions of dollars of subsidies it pays annually to American farmers. The EU and the US say the two emerging economic powers refuse to offer new market opportunities for manufacturing exports.
The top US trade official, Susan Schwab, appearing with her Indian counterpart at the US-India Business Council meeting, urged India to make the sacrifices necessary to push the trade deal through. Kamal Nath said India must be mindful of the millions of poor in his country who live on less than a dollar a day.
Polaski, the trade analyst, said Indian officials have been unwilling “to compromise what they see as their core interests for the sake of a trade deal.”
“There is no question that it causes heartburn,” Polaski said. “But I don’t think it’s going to cause a fundamental crack in the relationship.”