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From the early stages of negotiations on this agreement, the United States made clear that nuclear cooperation with China could take place only on the basis of a shared commitment to nonproliferation. The agreement was initialed in 1984, but formal signature was delayed for over a year while there were further discussions on China's nonproliferation policies and practices.

The Chinese Government has now pledged that it will not help other countries to acquire nuclear weapons. China has joined the IAEA, which plays a critical role in nonproliferation, and China adopted a policy of requiring IAEA safeguards on its nuclear exports to nonnuclear-weapon states. Moreover, the United States has every expectation that in carrying out its commitment not to assist other countries to acquire nuclear explosives, China's policies will be basically the same as those common to the major nuclear supplier countries. In the short span of two years, China has embraced nonproliferation policies and practices which it had eschewed vociferously for a quarter of century. This reversal is clearly of historic significance in our efforts to prevent the spread of nuclear weapons. The lengthy discussions which led to the US/China agreement and to consultations between China and other supplier nations contributed greatly to these changes in China's policies.

China's actions will be watched closely to ensure they are consistent with its words and US expectations. They know that nuclear cooperation with the United States rests on their strict adherence to basic nonproliferation policies and practices. If Chinese behavior ever became inconsistent with our expectations in this area, we would suspend the licensing of exports. The Chinese know that.

All Executive branch agencies and the Nuclear Regulatory Commission have concluded that the agreement meets all statutory requirements of US law. The Senate Foreign Relations Committee and the House Foreign Affairs Committee considered and approved the agreement in 1985. The agreement entered into force through an exchange of notes on December 30, 1985. South Africa

South Africa is not a party to the NPT and has unsafeguarded nuclear activities. Its nuclear policies have long been a concern to the United States, which has repeatedly urged South Africa to accept broader coverage of IAEA safeguards and to join the NPT. Because of its unsafeguarded nuclear activities, the United States will not engage in any significant nuclear commerce with South Africa.

In 1984, South Africa announced that it would enter negotiations with the IAEA for the purpose of placing one of its unsafeguarded nuclear facilities under IAEA safeguards. Substantial progress was made on this objective during 1985, and the Director-General of the IAEA reported this progress

to the IAEA member-states during the annual IAEA General Conference in September. This progress does not solve the proliferation problem posed by South Africa, however, but it makes a significant step in the right direction. Experience working with the IAEA in safeguarding this facility may lead South Africa to place additional facilities under IAEA safeguards.

During 1985, President Reagan issued an Executive Order in response to events in South Africa that further circumscribed US dealings with that country in the nuclear area. Exporting minor items that we could previously legally export to safeguarded facilities in South Africa is now prohibited. There are a few exceptions, but for all practical purposes, the United States has embarked on a nuclear embargo on South

Africa.

India and Pakistan

India's nuclear test in 1974 and Pakistan's efforts beginning in the late 1970s to develop an unsafeguarded nuclear program have placed this region in the forefront of proliferation concern for many years. The United States has been urging both countries to refrain from activities that could contribute to a nuclear arms race in the region.

The substantial US military assistance effort for Pakistan is directly linked by law and policy to restraint by Pakistan in its nuclear program. The continuation of this assistance

requires an annual determination by the President that Pakistan does not possess a nuclear explosive. The President so deter

mined for 1985 on November 25.

In recent years, public statements by India's leaders did not reveal much concern about Pakistan's unsafeguarded nuclear program. However, shortly after Rajiv Gandhi succeeded

his mother as Prime Minister of India, concern about the direction of Pakistan's nuclear program and what India should do in response became major topics of public debate in India. Before his visit to the United States in June, Prime Minister Gandhi also made clear that he believed the United States had a major responsibility to restrain Pakistan's nuclear program. The United States has also made it clear that India's policies are important to preventing a nuclear arms race in the subcontinent.

Over the long run, the key to avoiding further nuclear proliferation in South Asia may be efforts by India and Pakistan to find a regional arrangement that limits such a development. The United States has been encouraging such a dialogue, but in the interim, it is important that both countries avoid steps that could prompt the other into a sudden acceleration of their nuclear programs toward the acquisition of nuclear weapons.

ARMS AND TECHNOLOGY TRANSFERS

In 1985, AC DA participated actively in the formulation and implementation of US policy on the transfer of conventional arms and military technology in order to ensure that arms control factors are given full consideration in the arms transfer decision-making process.

ACDA's arms transfer activities are carried out within the framework of long-standing statutory and Administration policy requirements. The President's conventional arms transfer policy of July 1981 recognizes that arms transfers, judiciously used, play an important part in helping to deter aggression, in demonstrating our enduring interest in the security of friends and allies, and in fostering stability.

By helping to enhance

Conventional

stability the United States can improve the prospects for
the peaceful resolution of disputes in areas of the world
such as the Middle East or Central America.
arms transfers can also play an important role in supporting
our efforts to influence nations which may be considering
the acquisition of nuclear weapons. By helping friends and
allies meet their legitimate defense needs, conventional
arms can contribute to the self-confidence of such countries
in their own security thereby reducing possible pressures to
acquire nuclear explosives.

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