TRANSCRIPT: 10/29 BACKGROUND BRIEFING ON NUCLEAR COOPERATION
(U.S. will continue to monitor China on nuclear issue)

Washington -- Based on the steps the Chinese have taken and assurances they have provided, President Clinton will submit to Congress the certifications necessary under U.S. law to implement the U.S.-China agreement for peaceful nuclear cooperation, according to senior administration officials.

"We will monitor as well as we can China's nuclear cooperation with third countries, and we will know that it is succeeding if we don't see evidence of activity that's inconsistent with their pledges," administration officials said during a background press briefing October 29. The officials added that China does have a functioning export control system today.

The United States has alerted China to the dangers of providing nuclear assistance to Iran and has stressed that clear assurances on Iran are a prerequisite for China to receive certification and peaceful nuclear technology from the United States, according to the officials.

"We've been negotiating with the Chinese for over two years now on whether we can find an adequate basis for meeting the requirements of our law, and we believe, after about two years of very intensive work, we have met these requirements. In the course of this period, we have seen a marked positive shift in China's nuclear nonproliferation behavior, both in terms of new commitments as well as actual behavior," the officials said.

The officials noted the United States is also concerned about "various aspects of Chinese behavior" in the area of chemical-related trade.

"Many of you know that we imposed trade sanctions on Chinese entities, seven of them, back in May for assisting Iran's chemical weapons program. We have also pursued very actively the question of missile technology transfers to a number of countries with the Chinese. These are a very high concern of ours, a preoccupation in all of our discussions with the Chinese and at the highest levels," the officials said.

However, the officials added, "in our view it's not appropriate to link these other issues with the nuclear certification."

"Nuclear certification requires performance on nuclear issues, and to pile a number of other conditions on top of that would be to move the goalpost," the officials said. "It would create the risk of not being able to lock in the very substantial progress we would have."

Following is the transcript of the briefing:

(begin transcript)

THE WHITE HOUSE

Office of the Press Secretary

October 29, 1997

BACKGROUND BRIEFING BY SENIOR ADMINISTRATION OFFICIALS

Office of the Press Secretary

SENIOR ADMINISTRATION OFFICIAL: Let me start with a few remarks. The President, in his press conference statement, mentioned that on the basis of steps the Chinese have taken and assurances they have provided, he will submit to the U.S. Congress the certifications necessary to, under U.S. law, to implement the U.S.-China agreement for peaceful nuclear cooperation. Let me just start off by mentioning some of these steps, mentioning some of these assurances.

Now, we've been negotiating with the Chinese for over two years now on whether we can find an adequate basis for meeting the requirements of our law, and we believe, after about two years of very intensive work, we have met these requirements. In the course of this period, we have seen a marked positive shift in China's nuclear nonproliferation behavior, both in terms of new commitments as well as actual behavior. And let me go through a short list.

In May 1996, China committed not to provide assistance to -- (inaudible) -- Pakistan or anywhere else. We have monitored this pledge very carefully over the course of the last 16, 18 months, and the Chinese appear to be taking their pledge very seriously. We have no basis to conclude that they have acted inconsistently with this May 1996 commitment.

Also, the Chinese have provided assurances with respect to nuclear cooperation with Iran. What they have assured us is that they would not engage -- that they are not going to engage in new nuclear cooperation with Iran, and that they will complete a few existing projects, and these are projects which are not of proliferation concern. They were complete them within a relatively short period of time.

And in the course of our discussions with the Chinese and even before that, they've taken steps to suspend or cancel certain areas of cooperation that could have been of real proliferation concern. And there are indications that they've turned down the Iranians in a number of their requests in the nuclear field when they judged them to be of proliferation concern.

Another element is the adoption of comprehensive nationwide nuclear-related export controls. The Chinese did not have such a comprehensive system in the past, and this is one of the problems. They have, in the last several months, taken very significant steps to put in place a comprehensive regime to control nuclear-related equipment, technology, personnel exchanges. They've done this through a number of state council directives beginning in May and continuing through September, and they're continuing to work on and improve their regulatory structure.

Another important step is to join multilateral export control discussions. The Chinese had never before participated in any of these multilateral export control regimes, but they decided recently to join the so-called "Zangger Committee." That's the NPT exporters committee. It's a group of nuclear supplier states, all NPT parties, and they discuss how to control nuclear related exports in a responsible way. China has now joined that body -- it's a very positive stay.

This, in addition to a number of other steps, and Secretary Albright mentioned some of them -- they joined the NPT in '92, they supported its indefinite extension in '95, they stopped nuclear testing and signed the Comprehensive Test Ban Treaty in '96. They support a fissile material cut-off treaty. They supported the effort to strengthen the safeguard system of the International Atomic Energy Agency. So there are a range of steps in the nuclear nonproliferation area we have considered quite positive and they meet, in our view, the requirements of our law and that's why the President has proceeded to announce that he will submit the necessary certifications.

Q: Regarding Iran, are they in writing -- maybe you said it before, but are they in writing or was it just verbal commitments?

SENIOR ADMINISTRATION OFFICIAL: Let me mention, because we are on background, that the assurances we received are, as the President said, sufficiently specific and clear to meet the requirements of our law and to advance our national security interests, and they are in the form of writing. They're written, confidential communications.

Q: But you know from all your long experience in this that members of Congress are going to come to you and are going to say to you, "Assurances? We want ironclad agreements. China's not trustworthy." What are you going to say to that?

SENIOR ADMINISTRATION OFFICIAL: We have already begun to set up meetings with members of Congress. We know they're very interested in this issue. We know that they want to be informed in detail and we would like to accommodate them. So we will be prepared to discuss in detail these written communications.

Q: Are the written communications signed communications? I mean, I'm a little confused. Other than just being put on paper, are they signed by officials and that sort of thing?

SENIOR ADMINISTRATION OFFICIAL: These, I would call them authoritative, written communications.

Q: What's the point of this form? Why not simple, public documents, which is certainly what Congress -- or the critics in Congress would like? Why this form, why this secrecy? Why this form and why is the President so hesitant to talk about it publicly?

SENIOR ADMINISTRATION OFFICIAL: I didn't think he was hesitant at all. He mentioned that we had specific, clear assurances on this. And I just mentioned to you and Sandy Berger just mentioned to you specifically what those assurances were, the substance of them.

Why are these confidential, written communications? Well, we're dealing with relations with third parties and there are naturally some sensitivities in this regard. And this is the basis on which we agreed to go forward. But there's no effort to conceal what's being done. We will be speaking to members of Congress, as I say, in great detail. They will know precisely what has been agreed.

SENIOR ADMINISTRATION OFFICIAL: I'd like to add that we will continue to be monitoring Chinese behavior to make sure that it's consistent with the assurances that we've received. So this is not a situation where we're going to stop making certain that we have confidence that the Chinese are living up to those commitments they've given us. In the eventuality that they do not live up to those commitments, then, obviously, the nuclear agreement is -- we would no longer be able to go ahead with it.

Q: You know the critics in Congress are going to point out that this allows the Chinese to tell the third parties something else, and tell us a different thing.

SENIOR ADMINISTRATION OFFICIAL: What we care about is results. We care about the Chinese not providing any new nuclear cooperation with Iran, even under IAEA safeguards. This is a very significant step forward in our efforts to try to prevent the Iranians from acquiring a basic nuclear capability.

Q: But do these authoritative communications include pledges by China not to conceal any nuclear activity, so that's it's open enough that we can detect it either by satellite or by human intelligence or some other way?

SENIOR ADMINISTRATION OFFICIAL: The assurance is not to engage in any new nuclear cooperation. And we will monitor that pledge very carefully. And we will be able to know whether they're abiding by that pledge.

Q: Just out of curiosity, when was it actually -- when did it actually finish and say, now it can be told?

SENIOR ADMINISTRATION OFFICIAL: Well, when we indicated several days ago that the deal was not yet done, we were serious about that, and we continued to -- we had some discussions, as you know, in Beijing, and we reached a general understanding, but that had to be reviewed and discussed at senior levels. So it wasn't really resolved until the very eve of the summit.

SENIOR ADMINISTRATION OFFICIAL: Very recently. Today.

Q: The change was today?

SENIOR ADMINISTRATION OFFICIAL: It was today. Today was when the final exchange took place.

Q: Let me understand -- the confidentiality is to protect China's relationship with the third parties? And is it the case that all members of Congress who desire will be able to view these written assurances?

SENIOR ADMINISTRATION OFFICIAL: We are going to, beginning tomorrow, begin speaking with members of Congress and --

Q: Any and all?

SENIOR ADMINISTRATION OFFICIAL: Yes, any and all, who are interested. I hope there are many who will be interested, and we will brief them fully on it.

Q: Could you say more about the other types of proliferation that we were concerned about that sort of figured on the margins of this negotiation or as part of the negotiation, but not so straightforwardly a part of the quid pro quo. What progress did you make exactly?

And then, secondly, could you explain why there was a decision to elevate this issue about nuclear cooperation with Iran above all other issues that might have been used as part of the bargaining leverage in exchange for letting them have the nuclear technology that they're going to get? We could have attached conditions on human rights. I mean, it could have been the gamut, but you decided to restrict it fairly narrowly to this subject and not to others. So if you could explain that, too, I'd appreciate it.

SENIOR ADMINISTRATION OFFICIAL: On the question of the non-nuclear, the law is very clear. There are laws from 1985, laws from 1990. They set certain conditions for implementing this peaceful nuclear cooperation agreement, and the conditions have to do with China's record in the area of nuclear nonproliferation. That's why I dwell on the steps that China has taken. Those steps, those changes in behavior are what led the President to go forward with certification.

Now, we are also concerned about various aspects of Chinese behavior in the non-nuclear area -- in the area of chemical-related trade. Many of you know that we imposed trade sanctions on Chinese entities, seven of them, back in May for assisting Iran's chemical weapons program. We have also pursued very actively the question of missile technology transfers to a number of countries with the Chinese. These are a very high concern of ours, a preoccupation in all of our discussions with the Chinese and at the highest levels.

But in our view it's not appropriate to link these other issues with the nuclear certification, because the nuclear certification requires performance on nuclear issues, and to pile a number of other conditions on top of that would be to move the goalpost. And what we do is we -- it would create the risk of not being able to lock in the very substantial progress we would have.

And, by the way, as my colleague mentioned, this arrangements will give us continuing leverage on China, a continuing ability to engage with them and influence their program. Why? Because the agreement for cooperation, this 1985 agreement, makes China eligible to receive U.S. nuclear technology, materials, and equipment. All individual transactions have to be licensed on a case-by-case basis. And the Chinese know very well that if they act in a manner that it's inconsistent with their assurances to us, then it's within our rights to terminate nuclear trade. The Chinese know this. So engagement with them will provide continuing incentives for good behavior and for us to improve the record even on chemical and missile issues.

Q: But what about the missile issues? Because it's been sort of a new tack to separate the fuels from the missiles, and certainly in Korea and in Japan that's not viewed very --

SENIOR ADMINISTRATION OFFICIAL: I don't understand your question.

Q: In other words, this is about fuels, not about missiles.

SENIOR ADMINISTRATION OFFICIAL: It's about nuclear and non-nuclear.

Q: Right. But it separates nuclear and missile technology from the delivery system question, which has been an issue that's very upsetting to Japan and Korea. What about movement on that side of the --

SENIOR ADMINISTRATION OFFICIAL: As I said, we pressed the Chinese on each of these issues and we've made some progress on a number of them. Take the chemical -- China became an original party to the Chemical Weapons Convention back in April when we became an original party to the CWC. And as I say, before April, a number of Chinese entities engaged in activities which led to sanctions. But we are pressing now for improvements in China's export control system that can remedy this problem. And recently we learned that the government of China instituted some new procedures on requiring governmental review and approval of chemical-related trade so as to avoid these kinds of problems. We're pleased with their recognition that they need to institute some changes in their export control system to avoid these problems of the past.

Q: Can you give us a tangible sense of the things that the Chinese are now doing to increase the safeguards on the nuclear side?

SENIOR ADMINISTRATION OFFICIAL: Again, safeguards on what, you mean their own export control system?

Q: Yes.

SENIOR ADMINISTRATION OFFICIAL: They have adopted very comprehensive -- this is a matter of public record; these are state council decisions which are legally binding and they have, for example, published nuclear control lists. As you know, the Nuclear Suppliers Group puts out comprehensive lists of nuclear items and nuclear-related dual-use items. They've published those Nuclear Suppliers Group lists, and they have put out guidance to all governmental entities, as well as nongovernmental organizations to ensure that all of this trade is licensed and that no assistance can go to unsafeguarded nuclear facilities. It's a matter of record and you can study these, and they're quite detailed and quite rigorous.

Q: I guess what I meant was whether it's IPR or missile technology, the issue has often not been is there a rule on the books, but -

SENIOR ADMINISTRATION OFFICIAL: As my colleague mentioned at the beginning of his presentation, since May of 1996, since May of last year when China provided this new commitment that they would not provide assistance to unsafeguarded nuclear facilities, we've been watching the situation very closely. We have raised with the Chinese on a number of occasions particular instances where we were concerned that countries might be trying to obtain such assistance, and we're satisfied that there is no evidence to conclude that the Chinese have violated that commitment.

So we've got a track record dating back to May of last year where we think the Chinese have seriously invested the resources to make sure that that kind of thing doesn't go on.

Q: Can I ask again on an earlier question -- did I understand you to say you will let members of Congress review these agreements?

SENIOR ADMINISTRATION OFFICIAL: We will make available to members of Congress in confidence, because these are confidential diplomatic communications, an opportunity to read and judge for themselves these written assurances that we've been given, yes.

Q: -- assurances specifically -- different countries, specifically, say, Iran, Pakistan?

SENIOR ADMINISTRATION OFFICIAL: Yes. No, the only -

Q: Just Iran?

SENIOR ADMINISTRATION OFFICIAL: Yes, just Iran. The written assurances that the Chinese have given in public concerning their general policy toward preventing any assistance from going to other countries' unsafeguarded nuclear facilities or nuclear weapons programs, that's general, that applies to everybody.

Q: And how soon do you think American companies will start trying to contract with China for nuclear reactors?

SENIOR ADMINISTRATION OFFICIAL: I think that there are discussions going on now, but nothing can actually be activated until we go through a process that was set up by the 1985 law. And what that requires is that the President needs to submit to Congress a certification package which includes a number of formal certifications; it includes an unclassified and a classified report on Chinese behavior; it includes a waiver of some of the 1990 Tiananmen Square sanctions. That package then rests before Congress for 30 days of congressional session before it will come into force.

And to answer your question, the President intends to submit the certification package promptly. I can't tell you exactly when that will be. We certainly hope it will be before Congress goes out of session this year.

Q: -- join the Zangger Group, was there not a group that they declined to join because it requires open inspections of all plants, and Pakistan and India have -

SENIOR ADMINISTRATION OFFICIAL: Yes, let me explain that. There are two international groups that control nuclear technology. There's the Zangger technology, which is the oldest one -- that's the one that's associated with the Nonproliferation Treaty. There is a newer one, which is called the Nuclear Suppliers Group, and the membership is almost the same and the trigger lists and the guidelines for export in the two are almost the same.

The only significant difference is that the Nuclear Suppliers Group requires something called "full scope safeguards" as a condition for supply. And what that means is that the countries in the Nuclear Suppliers Group will not provide any peaceful nuclear technology to any country unless that country accepts IAEA safeguards on all of their nuclear facilities. The Zangger Committee just requires that safeguards be applied to whatever nuclear cooperation you provide to another country.

Now, in the case of China, we think that they should adopt full-scope safeguards as a condition for a supplier and we'll be continuing to make the argument to them that we think they should do that. But they have safeguarded peaceful nuclear cooperation with both Pakistan and India, and they told that at this particular point, they're not prepared to suspend those projects.

SENIOR ADMINISTRATION OFFICIAL: One thing to add. The Nonproliferation Treaty doesn't require you to require full-scope safeguards as a condition of supply. It's sufficient to meet your NPT obligations to apply safeguards to only your individual exports. So full-scope safeguards is something that the Nuclear Suppliers Group didn't adopt until 1992, whereas NPT dates from 1970. So, yes, we would like all countries to require full-scope safeguards, but it's not a requirement of the NPT and it's not a requirement of the certification.

Q: Wait a minute. Can I ask you if you succeeded in getting the Chinese to accept the somewhat stricter export list of the second group, even though they weren't necessarily going to join it, which I know was one of your aims? Did you have any luck with that?

SENIOR ADMINISTRATION OFFICIAL: The list that they have adopted to control both their nuclear items and their nuclear-related dual-use items is essentially the list that is internationally accepted. So the nuclear items is essentially the same as the Zangger trigger list; the dual-use list is essentially the same as the NSG, the Nuclear Suppliers Group dual use list. So in terms of what the Chinese have done formally it very much meets the international standard.

Q: When do you expect the administrative system for their nuclear export controls to be fully operational, and how is the U.S. going to determine that it is operating as it should?

SENIOR ADMINISTRATION OFFICIAL: The second is easy. We will monitor as well as we can China's nuclear cooperation with third countries, and we will know that it is succeeding if we don't see evidence of activity that's inconsistent with their pledges. That's the best way. When will it be fully up and running? It's already been in effect. There are procedures that have been adopted administratively for quite a while. Now they've augmented this with these state council directives, which have the force of law and continue to work to improve. But they do have a functioning export control system today.

SENIOR ADMINISTRATION OFFICIAL: I would just add very quickly that the one last piece of their system that needs to be put in place is a regulation that covers dual-use items, which would flesh out and supplement the existing executive order that they have in place, and they've committed to finish that dual-use regulation by the middle of next year, by mid-1998.

Q: They get no dual-use technology prior to that, do they?

SENIOR ADMINISTRATION OFFICIAL: You mean, from the United States?

Q: From the U.S., yes.

SENIOR ADMINISTRATION OFFICIAL: Sure, but not necessarily dual-use items for their nuclear program. Much of that is prohibited by the current restriction. But obviously -- dual-use items means they have nuclear as well as non-nuclear uses.

Q: You've been negotiating this for a while with them; the negotiations have been difficult. I know they were very reluctant to specifically mention the name "Iran" in the agreement that they gave you. What was it that you think finally convinced them to give you the agreement you wanted?

SENIOR ADMINISTRATION OFFICIAL: This is, of course, speculation, because we don't know for sure. First of all, I think my colleague and I have been able to persuade the Chinese that it really is dangerous for them to provide nuclear assistance to Iran. I do not think the Chinese have any political or strategic interest in inadvertently helping Iran to acquire nuclear weapons. I think the Chinese decided partly on the basis of our diplomacy, partly perhaps on the basis of their own information and calculation that the Iranians in the nuclear area really have to be treated very carefully. And I think that the Chinese have decided to act on the basis of that calculation.

Secondly, I think that we made it very clear to the Chinese that in order to proceed with the certification and their desire to get useful -- to get peaceful nuclear technology from the United States, which they clearly think is very desirable, they had to meet the requirements that the President set; and one of those was to provide clear assurances on Iran.

SENIOR ADMINISTRATION OFFICIAL: Let me just say on that, very interesting -- this was several weeks ago when a this was several week ago when a senior Chinese visitor came to town. The President made very clear to him that this was an essential requirement; we needed to have this assurance on Iran, or there could be no certification. He made it crystal clear, and I think the President, the strength of his statement on that was the key factor. I think they recognized that they could either have nuclear cooperation with us or with Iran, and they decided that they preferred -

Q: Was the form of the assurance a matter for negotiation?

SENIOR ADMINISTRATION OFFICIAL: The form was the subject of lengthy discussions, because as we mentioned before, there is reluctance to put on paper names of third countries.

Q: What of these post-Tiananmen sanctions are still in place?

SENIOR ADMINISTRATION OFFICIAL: I'm not an expert in the range of Tiananmen sanctions. They're still quite broad. I forget -- it was the President who mentioned earlier that this element of it was lifted because of their performance on nuclear nonproliferation. But what remains, you would have to consult an expert on that.

Q: Could you describe the two projects that the United States is allowing China to complete with Iran? And why is there no concern about proliferation?

SENIOR ADMINISTRATION OFFICIAL: Sure, I can do that. The first project is called a "Zero Power Reactor." And as the name suggests, it's a research instrument that doesn't have any power, so it doesn't present a proliferation concern; it can't produce any significant amount of plutonium.

The Chinese have been working on that project for several years. It is essentially completed. They're now just doing the final checkout, and the Chinese have told us that they expect that project to be finished, as far as they're concerned, by the end of this year. So that's something that is virtually at the point of being completed.

The second project is called a "Zirconium Tube Factory." And zirconium is used as cladding for nuclear power reactor fuel. Of course, the Iranians don't have any nuclear power reactors, and they may never have any, but this is part of their ambitious hope that they will eventually be able to develop the industrial infrastructure to build and support nuclear power -

Q: Why is it considered a restricted dual-use item?

SENIOR ADMINISTRATION OFFICIAL: Because it has a nuclear use.

Q: But it's only civilian nuclear use, right?

SENIOR ADMINISTRATION OFFICIAL: Technically, you can use it as cladding for any kind of reactor. You could technically use it as cladding for a research reactor. It's not typically done because it's sort of overdesigned for that purpose. Normally, for research reactors, you would use a different type of cladding.

Q: But it's -- still, it's in the civilian area that it has -- all this application in the civilian area -- the question is, why is it restricted as a dual-use item if it has no proliferation restriction, no direct proliferation restriction implication at all?

SENIOR ADMINISTRATION OFFICIAL: Keep in mind that all of the items that are covered by the Zangger Committee are -- they cover civilian, they cover nuclear power reactors.

SENIOR ADMINISTRATION OFFICIAL: Could be civilian nuclear or non-nuclear.

MCCURRY: -- plant was a civilian research reactor, too.

Q: How much is the genie out of the bottle once they get the highest level U.S. technology in terms of nuclear power plants -- once we and Westinghouse start building the high-tech nuclear power plants, how much is the genie out of the bottle, how much would they learn, how much do they no longer need us?

SENIOR ADMINISTRATION OFFICIAL: Of course, the Chinese are actively negotiating contracts with European, Canadian and Russian vendors to get nuclear power plants, which are at a very high level.

Q: Theoretically, ours is better.

SENIOR ADMINISTRATION OFFICIAL: Well, I happen to think ours are better.

Q: Well, yes.

SENIOR ADMINISTRATION OFFICIAL: The answer to your specific question is that the commercial contracts and the negotiations between China and U.S. vendors will have to determine the extent to which those vendors provide to the Chinese assistance in terms of making it possible for them to eventually be self-sufficient.

Q: The government has no say in that?

SENIOR ADMINISTRATION OFFICIAL: The government believes that's a matter that's appropriate for the commercial negotiations between U.S. companies and the Chinese government.

Q: You mentioned that you were able to convince the Chinese that it would be dangerous to supply nuclear technology to Iran. Why would it be dangerous for the Chinese to do this? I mean, Iran and China seem to cooperate on a number of issues.

SENIOR ADMINISTRATION OFFICIAL: I don't think China has any interest in seeing Iran armed with nuclear weapons. I'm very convinced of that. I do not believe the Chinese -- as a general matter, I think the Chinese have over a period of time, 10 years or more, the Chinese have come to accept that nuclear proliferation is not in their interest. They do not wish to see nuclear weapons spread around the world; certainly not in their part of the world.

MCCURRY: One last question.

Q: Who is the assurance addressed to?

SENIOR ADMINISTRATION OFFICIAL: We're not going to discuss the specific -- those kinds of specifics of the issue.

Q: Is it in a letter, though, that's addressed to someone in particular in the U.S. government?

SENIOR ADMINISTRATION OFFICIAL: It's an authoritative, written communication -

Q: With an addressee?

SENIOR ADMINISTRATION OFFICIAL: I think we'll just leave it as an authoritative written communication.

Q: You cannot say whether it's from Jiang or it's from the central council or -

SENIOR ADMINISTRATION OFFICIAL: It's authoritative.

MCCURRY: Okay. (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: Thank you, Mike.

MCCURRY: Thank you.

(end transcript)

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