V. Regional Arms Control

A. EUROPE

1. ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE (OSCE)

In 1996, the OSCE devoted significant resources to the negotiation and implementation of the arms control agreements set forth in the General Framework Agreement for Peace in Bosnia and Herzegovina, initialed in Dayton on November 21, 1995, Annex 1-B. These agreements are described in detail in the section on Balkan Arms Control Under the Dayton Accords.

In preparation for the 1996 OSCE Lisbon Summit, and in accordance with the 1994 OSCE Budapest Decision documents, the Forum for Security Cooperation (FSC) has developed two decision documents: a Framework for Arms Control and the Future Agenda for Arms Control. The Framework is intended to serve as the basis upon which future European conventional arms control agreements will be negotiated, and adopted. The Framework recognizes that a number of existing arms control treaties can serve as the foundation for future agreements, and attempts to address the diverse challenges and risks to military security in the OSCE region. The Agenda outlines several broad areas for future work: enhancing existing CSBMs, further development of regional CSBMs, and the development of new CSBMs. These two documents were adopted by the FSC at the Lisbon Summit. The OSCE has also constructed a Security Model for Europe for the 2lst Century.

2. CENTRAL EUROPE

In the context of developing U.S. arms transfer policy for Central Europe and the decision to release advanced fighter aircraft to Poland, Hungary and the Czech Republic, ACDA advocated measures to increase transparency of the procurement of major weapon systems. These initiatives are based on a commitment by the countries in the region to maintain a regional military balance at the lowest levels consistent with security needs to prevent excessive arms build-ups. Future arms purchases would conform with this strategy and would be conducted so as to promote greater transparency in a more rigorous CSBM regime. These efforts will serve to ease tensions within Central Europe and to alleviate Russia's concerns about NATO expansion.

B. EURASIA

Collapse of the former Soviet Union and its replacement by 15 independent states has fundamentally altered the geo-strategic environment in Eurasia. Eurasian (as distinguished from European) regional arms control is in a very early stage. At this early point, our objective is to explore what can be accomplished by bilateral or multilateral arms control with China and with the states of the former Soviet Union, as well as regionwide arms control. Our goals in this region are greater transparency, regional dialogues, maximum security for and control of nuclear weapons and, above all, nonproliferation. In this regard, ACDA was instrumental in supporting the U.S. decision to become an unofficial observer in the Conference on Interaction and Confidence-Building Measures in Asia.

Our arms control contacts in the region have been primarily with Belarus, Kazakstan, Russia, and Ukraine, which are actively participating in the implementation of the START and INF Treaties and SCC discussions on ABM Treaty issues. We are also reaching out to the other states of the former Soviet Union. Many are beginning to understand that arms control and nonproliferation are significant tools that can improve any nation's security.

In light of China's growing military and economic power, its troublesome proliferation history, and its impact on nuclear policies in India and Pakistan, we face an abundance of problems that need to be addressed by a U.S.-China arms control dialogue. We are cautiously optimistic that strategic dialogue with China can lead to improved nonproliferation behavior, better transparency, security and control of China's strategic nuclear forces, and reduced tensions among the major powers of the region.

C. EAST ASIA AND THE PACIFIC REGION

1. NORTH KOREA

The Korean Peninsula remains a heavily armed area of high tension where military preparedness is intense and political intentions are difficult to determine. Nevertheless, the threat posed by North Korea's nuclear program has been substantially reduced by conclusion of the U.S.-North Korea Agreed Framework on October 21, 1994.

North Korea acceded to the Nuclear Non-Proliferation Treaty in 1985 but did not negotiate a nuclear safeguards agreement with the IAEA. Toward the end of 1991, North Korea began to take steps to convince the world that its nuclear program was peaceful. These included negotiating its NPT safeguards agreement with the IAEA, and signing an agreement with South Korea that banned nuclear weapons and reprocessing and enrichment facilities on the Korean Peninsula; it also included a commitment to negotiate a bilateral inspection regime. At about the same time, the two Koreas also signed an agreement on reconciliation and non-aggression.

North Korea's NPT safeguards agreement came into force in April 1992, and for a time North Korea cooperated fully with the IAEA in implementation of the agreement. North Korea revealed several nuclear facilities, including a reactor capable of producing significant quantities of weapons-grade plutonium that began operating in 1986, a reprocessing plant, and two larger reactors under construction.

However, detailed analysis of nuclear samples taken by the IAEA raised questions about North Korea's initial declaration of plutonium production, and North Korea appeared to be attempting to conceal two possible nuclear waste sites. Ultimately, North Korea refused to allow the IAEA to inspect these two sites.

The IAEA Board of Governors adopted a resolution on February 25, 1993, urging North Korea to extend full cooperation to the IAEA and to permit access to these sites. North Korea continued to refuse, and on March 12 sent a letter to the U.N. Secretary-General stating its intention to withdraw from the NPT. On May 11, the Security Council passed a resolution urging North Korea to reconsider its stated intention to withdraw from the NPT and to comply with its NPT safeguards agreement. The Security Council invited all U.N. members to support that effort. This set the stage for direct U.S.-North Korea talks.

On June 11, 1993, following talks in New York, the U.S. and North Korea issued a joint statement in which North Korea agreed to suspend its withdrawal from the NPT. In a separate statement, the U.S. also noted that the dialogue could continue only if North Korea avoided certain steps including additional reprocessing, any break in the continuity of IAEA safeguards, or a withdrawal from the NPT.

A further step was taken at the next round of talks, which was held in Geneva from July 14-19, 1994. In the joint statement issued at the close of these discussions, North Korea agreed that it was "prepared to begin" consultations with the IAEA on outstanding issues and with South Korea on bilateral issues including the nuclear issue. The U.S. made clear that continuation of our dialogue requires continuation of safeguards on North Korean nuclear facilities and a resumption of the North-South dialogue.

The U.S. agreed that it was prepared to support substitution of light water reactors for North Korean graphite-moderated reactors as part of a broad and thorough solution to the nuclear issue.

Light water reactors are not optimal producers of plutonium for nuclear weapons programs and can be more effectively safeguarded than North Korea's current graphite moderated reactors.

On October 21, 1994, after sixteen months of negotiations, the United States and North Korea signed an Agreed Framework, designed to lead to an end to the threat of proliferation on the Korean Peninsula, and to provide the basis for more normal relations between North Korea and the rest of the world.

In the Agreed Framework, North Korea has committed itself to:

The Agreed Framework also provides that the U.S. will organize an international consortium to supply two light water reactors to North Korea to replace the graphite reactor program which is terminated under the Agreed Framework. But no critical components will be supplied until North Korea has satisfied the IAEA that it is in full compliance with its NPT obligations.

In 1996 the U.S. and North Korea continued to implement the Agreed Framework. North Korea has frozen its nuclear program, the freeze has been verified by a continuous IAEA presence at the Nyongbyon site, and North Korea's spent fuel is being safely stored. The U.S., along with the Republic of Korea and Japan, have organized the Korean Peninsula Energy Development Organization (KEDO) which has concluded negotiations with North Korea on a supply agreement for the provision to North Korea of two South Korean model 1,000 MWe reactors. KEDO now has 12 member states. South Korea and Japan have committed to fund the bulk of the LWR project through KEDO. Further, the U.S. and KEDO delivered 500,000 tons of heavy oil to North Korea for heating and electricity production in the year following October 21, 1995. As part of the Agreed Framework, the U.S. agreed to arrange to supply this oil in order to compensate for the energy forgone due to the freeze on North Korea's reactors.

The Agreed Framework does not rely on trust. All of its steps will be verifiable. If fully implemented, the Agreed Framework will defuse one of the most dangerous nuclear hot spots in the world, and will ultimately resolve this nonproliferation threat. Since conclusion of the agreement, North Korea has halted construction and operation activities at its reactors, cooperated in storing its spent fuel without reprocessing, and allowed IAEA monitoring of its nuclear facilities. However, it has not yet allowed "special inspections" pursuant to its NPT safeguards agreement.

ACDA's Role: ACDA has played a substantial role in formulating U.S. policies to convince North Korea to resolve the nuclear issue. ACDA actively participated in all U.S.-North Korea high-level negotiations that contributed to the U.S.-North Korea Agreed Framework and has played a critical role in implementing aspects of the Agreed Framework. In particular, ACDA is the lead agency on diplomatic issues related to the disposition of North Korea's plutonium-bearing spent fuel, and on technical issues related to IAEA inspections in North Korea.

In April 1996, the U.S. and North Korea began to place the fuel in canisters, where it will remain under seal until it is shipped out of North Korea in accordance with the Agreed Framework. Over half of North Korea's fuel has now been canned. During September 1996, ACDA led an interagency team to North Korea to discuss outstanding issues on the safe storage of North Korea's spent nuclear fuel.

Additionally, ACDA participates in the privately-organized Northeast Asia Cooperation Dialogue, intends to participate in the thus-far dormant Northeast Asia Security Dialogue, and will explore other possible means of resolving issues involving North Korea.

2. SOUTH KOREA

The United States has maintained its strong alliance with South Korea, including joint efforts to achieve peace on the Korean Peninsula. On April 16, 1996, President Clinton and South Korean President Kim proposed to convene a Four Party Meeting of representatives of South Korea, North Korea, U.S., and China as soon as possible and without preconditions. The purpose of this meeting would be to initiate a process aimed at achieving a permanent peace. North Korea has said that it wishes to replace the armistice agreement with a permanent peace, but has not responded to this offer.

South Korea has continued to strengthen its nonproliferation credentials. Already an NPT party, in 1995 Seoul adopted export regulations for nonproliferation-related items to comply with the guidelines of the Nuclear Suppliers Group and the NPT Exporters (Zangger) Committee and was accepted as a member of these groups. South Korea's new regulations also comply with the Missile Technology Control Regime, the Australia Group, and the post-COCOM multilateral Wassenaar Arrangement. In 1996, South Korea became a member of the Australia Group and Wassenaar Arrangement, while continuing to work closely with the U.S. to meet all membership criteria for admission to the MTCR.

ACDA's Role: As part of the joint U.S.-South Korean effort to enhance mutual security, ACDA has continued its active role in working with South Korea on arms control and nonproliferation. Building on December 1995 arms control bilaterals in Seoul, ACDA Director Holum met with South Korea's Foreign Minister in Washington in March 1996 to discuss North-South relations, U.S.-North Korean missile talks, regional arms control in Northeast Asia, and stability in the Korean Peninsula. ACDA also participated in the 17th U.S.-South Korean Joint Standing Committee on Nuclear and Other Energy Technology in April 1996 for the purpose of facilitating bilateral cooperation on the peaceful uses of nuclear energy. This meeting covered such nonproliferation issues as the NPT, IAEA safeguards strengthening, export controls, and regional arms control. Similarly, ACDA participated in senior level bilaterals with South Korea on missile and CW nonproliferation.

3. CHINA

China is rapidly emerging as a major world power and is also increasing its involvement in Asian regional matters. Part of this more assertive role is reflected in China's growing participation in global and regional security institutions. One goal of the U.S. engagement policy with China is to establish a bilateral dialogue on a wide range of security issues, including on arms control and nonproliferation.

Continued progress on many U.S. arms control and nonproliferation goals depends critically on the constructive participation of China. The Director of ACDA established an internal task force in late 1995 to examine U.S. arms control approaches to China. The task force concluded that the United States should institutionalize a regular arms control dialogue with China that establishes a basis for long-term cooperation based on common arms control and nonproliferation interests, and thus goes beyond specific controversies. ACDA Director Holum led an interagency delegation to Beijing in October 1996 to resume the dialogue that had been suspended during the downturn in U.S.-Chinese relations in 1995. The discussions focussed on the Administration's future arms control priorities and on general themes and principles that guide each country's approach to arms control. There was agreement to continue the dialogue at senior levels and on the idea of expert-level consultations.

Over the past decade, China has assumed a more participatory role in arms control and nonproliferation with its adherence to the Biological Weapons Convention, International Atomic Energy Agency, Non-Proliferation Treaty, signature of the Chemical Weapons Convention, and the Comprehensive Test Ban Treaty, and support for Convention on Conventional Weapons revisions on landmines and blinding lasers. China has also supported negotiations on a Fissile Material Cutoff Treaty and efforts to address proliferation problems in South Asia and in North Korea.

Problems have arisen primarily in the area of nonproliferation export controls, where China has failed to adopt an effective national system and has proven reluctant to embrace completely the norms established by the multilateral regimes, i.e. the Australia Group (CBW exports), the Nuclear Suppliers Group, the Missile Technology Control Regime and the Wassenaar Arrangement (conventional arms exports and related dual-use items). Among the exports of concern are China's nuclear- and missile-related ones to Pakistan, missile- and CW-related ones to Iran, and sales of advanced conventional arms exports to Iran.

These Chinese export policies have sometimes led to the imposition of U.S. sanctions pursuant to U.S. law. A ban on U.S. civil nuclear cooperation with China has been in place since the mid-1980s because of concern over China's cooperation with Pakistan's nuclear program. Sanctions have been imposed twice in recent years against Chinese entities for certain missile-related transfers to Pakistan. ACDA has strongly supported continued engagement with China on proliferation-related concerns. The Administration will not hesitate to impose sanctions again if the evidentiary standards necessary to trigger U.S. laws are met.

During 1996 the United States sought to improve U.S.-Chinese cooperation on arms control and nonproliferation. In addition to resumption of the arms control dialogue led by ACDA, there were several meetings of U.S. and Chinese experts to address policies on the export of nuclear-, missile-, and chemical-related items; and on conventional arms transfers. A senior-level interagency team visited Beijing in November to inaugurate bilateral global security talks, which included an overview of key nonproliferation topics. Secretary of State Christopher also raised arms control and nonproliferation issues with Chinese Foreign Minister Qian several times during the year. At the close of his last trip to Beijing on November 20 the Secretary remarked that his discussions on nonproliferation had advanced U.S.-Chinese cooperation, but that the two sides agreed that more must be done to advance our goals. One primary goal is to expand cooperation between the United States and China on the establishment of effective nonproliferation export control systems.

One positive development on export controls occurred on May 11, 1996 when China announced that it will not provide assistance to unsafeguarded nuclear facilities. Subsequently, the Secretary of State determined that there was insufficient evidence to conclude that China had "willfully" aided in the production of unsafeguarded special nuclear material through the transfer of ring magnets to Pakistan's enrichment plant. This determination allowed for the resumption of normal Export-Import actions in support of U.S. trade to China. Chinese actions since May have conformed with this policy declaration. This announcement by China was a significant first step toward implementation of the 1985 peaceful nuclear cooperation agreement. But China must rigorously abide by that policy declaration and take other actions as well before the Administration can move ahead with efforts to implement the 1985 agreement.

D. SOUTHEAST ASIA

The United States seeks in the 21-member Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF) to promote regional arms control through military transparency and other confidence-building measures in the Asia-Pacific region. ARF is the only regionwide multilateral, governmental regional security forum in the Asia-Pacific region. ARF has agreed to an evolutionary vision of its future, involving a three-stage process: confidence- and security-building; conflict prevention; and conflict resolution. Evolution in this direction will proceed at a pace "comfortable" for all members.

We encourage the ARF to adopt a range of CSBM's related to military transparency and conventional arms, specifically to:

We also seek through the ARF to encourage universal adherence to the principles and commitments of the nonproliferation treaties and regimes (NPT, MTCR, CWC, BWC, Australia Group, NSG, Zangger Committee) and to engage other members not fully integrated into the global treaty regimes. These dialogues can work to encourage the development of effective export control mechanisms relating to technologies of development and production of weapons of mass destruction (WMD). Asia-Pacific security dialogues such as ARF are not, however, alternatives to global arms control fora as primary negotiating bodies on arms control and nonproliferation matters. Hence:

ACDA's Role: In January 1996, ACDA attended the first meeting of the ARF Intercessional Group (ISG) on CBMs in Tokyo, which was co-chaired by Japan and Indonesia. Eighteen Asia-Pacific countries and the EU discussed security perceptions, defense relations, defense white papers, and the possibility of a regional register of arms transfers. ACDA led the effort to encourage the ARF to adopt a range of CSBMs related to military transparency measures, i.e., to seek universal regional participation in the UN Register of Conventional Arms, to make voluntary submissions of additional information, to support expansion of the Register at the CD and to support development of a regional register. The paper was used as a basis for discussion and was placed on the agenda for the April 1996 ISG in Jakarta, where the topic was adopted. Representatives from ACDA attended the Senior Officials Meeting (SOM) in Yogyakarta in May and attended the ARF Ministerial in July 1996 in Indonesia. At that time, key bilateral discussions took place with representatives of five key countries in the conference on security issues, arms control and nonproliferation.

E. NORTHEAST ASIA

ACDA participated fully in government and mixed governmental and nongovernmental efforts to promote a stable security structure, and bilateral and multilateral dialogues in Northeast Asia.

The Northeast Asia Cooperation Dialogue (NEACD), coordinated by the Institute of Conflict and Cooperation at the University of California, San Diego, is a "Track II" effort started in 1993, intended to promote consultative processes for cooperative dialogue on security issues, as well as other areas, in Northeast Asia. Current participants include China, Japan, Russia, the Republic of Korea, and the United States. (The DPRK has declined to participate in the NEACD talks, although it did participate in the first planning meeting.) Participants are government officials acting in a private capacity and nongovernmental scholars expert in the region. ACDA attends NEACD meetings and participates in planning sessions in-between meetings.

ACDA also supports the thus-far dormant Northeast Asia Security Dialogue (NEASED). The NEASED process is intended to be a "Track I" official dialogue on security matters between the states of Northeast Asia that builds on the groundwork paved by the NEACD. There have not been any official NEASED meetings.

ACDA has taken leadership in some fora designed to promote greater understanding of the Northeast Asia security dilemma by sponsoring a Northeast Asia Regional Arms Control study with RAND/KIDA/CAA. More recently, ACDA has entered into a formal agreement with the National Defense University (NDU) to co-sponsor a Northeast Asia regional arms control simulation.

F. SOUTH ASIA

While the likelihood of a fourth war between India and Pakistan is small, the possibility of a war in the region going nuclear is perhaps higher in South Asia than anywhere else in the world. Both nations could assemble nuclear weapons within a short time and both have tested missiles and acquired aircraft capable of delivering such weapons.

Both India and Pakistan have signed the Chemical Weapons Convention (CWC). India recently ratified it.

CTBT negotiations touched off a firestorm of public debate in India regarding India's nuclear "option." In May and June 1996, the nuclear question became an issue in India's state elections for the first time. At that time, India's new coalition government, headed by Prime Minister Deve Gowda, attempted unsuccessfully to block the Treaty's transmittal to the UN General Assembly in New York, and has refused to sign the Treaty. Pakistan has said that it will not sign the Treaty until India does, and until it has a chance to assess how signing the Treaty will affect its security.

Both nations have expressed their support for a fissile material cutoff treaty in the past. However, at the 51st UNGA, India again sought to link FMCT to nuclear disarmament talks. Pakistan called for FMCT talks to begin, without explicit linkage, but did call for the establishment of an Ad Hoc Committee on nuclear disarmament in the CD.

Recognizing the potential for conflict, India and Pakistan have undertaken several steps to reduce regional tensions. The two countries have signed and ratified bilateral agreements on avoidance of airspace violations, notification of military exercises, and establishment of a hotline at the senior military level. In 1991, India and Pakistan ratified an agreement not to attack each other's nuclear facilities. Lists of facilities covered by the agreement have been exchanged since 1992. India and Pakistan have also declared a regional ban on chemical weapons, and are working on a similar statement concerning biological weapons.

We remain concerned, however, that neither side has fully implemented its bilateral agreements. As of December 1996, talks between Indian and Pakistani Foreign Secretaries intended to address regional security concerns and consider confidence-building measures had been in abeyance since January 1994. Failure by both states to comply with existing bilateral agreements may actually be adding to regional tension. In June 1996, then-Pakistani Prime Minister Bhutto proposed to new Indian PM Deve Gowda that they renew the dialogue between their two countries. In a letter accepting the offer, Prime Minister Deve Gowda also announced a series of unilateral steps including increased journalist exchanges, expediting of visa procedures, and an invitation for a Pakistani parliamentary visit to India. Pakistani concerns regarding the state assembly elections in Jammu and Kashmir, however, delayed an official Pakistani response to Deve Gowda's letter. Informally, Pakistan has endorsed the idea of renewed talks.

In bilateral meetings with both India and Pakistan, ACDA has encouraged establishment of a joint implementation body to oversee the monitoring of agreed confidence-building measures and to address potential disputes. We stressed the value of continuing arms control/CBM discussions regardless of political differences.

Regional instability continues to be aggravated by Indo-Pakistani tensions, particularly over Kashmir. India's belief that it needs a nuclear capability to be viewed as a major world power also contributes to the problem. Nuclear and missile proliferation is both a cause and an effect of this situation. While Pakistan and China supported in principle the establishment of a security dialogue for the region involving all key parties, India has not accepted the proposal. In addition, relations between India and Pakistan continue to be strained by potential serial production and deployment by India of the Prithvi ballistic missile, and Chinese nuclear and M-11 missile-related transfers to Pakistan.

The U.S. seeks to work with both countries on a bilateral, regional, and global basis to reduce regional tensions and address the threat to South Asian and international security posed by the existence of advanced ballistic missile and unsafeguarded nuclear programs in the region. To this end, the U.S. has endeavored to promote consideration by India and Pakistan of:

The U.S. continues its efforts to prevent the export of missile and nuclear weapons-related material, technology, and equipment to India and Pakistan. We have been greatly aided by the actions of the Nuclear Suppliers Group to restrict the export of nuclear-related dual-use commodities to countries of proliferation concern, and to require full-scope safeguards as a condition of new nuclear supply. In addition, the missile programs of both countries have been slowed by export license denials by the MTCR partner countries. The U.S. continues to urge both India and Pakistan to place all their nuclear facilities under IAEA safeguards, and to adopt responsible national export control policies and regulations to prevent the proliferation of WMD and missiles capable of delivering them. India has made some progress in this area by passing legislation to improve its missile-related export control laws.

Because of continued tension, a major factor influencing conventional arms transfer policy toward South Asia is the regional balance. In this regard, we are particularly concerned that arms sales to the region not upset the current military balance, aggravate threat perceptions, or substantially enhance offensive war-fighting capabilities.

Steps to implement the Brown Amendment, signed by the President in January 1996, continued through the year. This amendment permits economic and humanitarian assistance, counter-narcotics and counter-terrorism assistance to Pakistan, and allowed a one-time release of $370 million in military equipment for which Pakistan had paid but not received due to implementation of the Pressler sanctions in 1990. In addition, the Brown Amendment exempted economic assistance and funds for military education and training from Pressler Amendment sanctions. This assistance to Pakistan is still restricted, however, under the Symington Amendment. The U.S. has also made it clear to Pakistan that efforts to move forward with partial implementation of the Brown Amendment are based on a continuation of Pakistan's current voluntary restraint in its nuclear and missile activities.

ACDA's Role: ACDA provides assessments of the positions taken by India and Pakistan on these agreements and actively supports interagency efforts to develop U.S. policy toward South Asia.

ACDA is developing regional arms control techniques and confidence-building measures aimed at reducing tension in the region and promoting bilateral efforts to address security concerns in the region. Both governmental and nongovernmental fora have been used as vehicles to discuss CBMs and other arms control/nonproliferation initiatives. In October, ACDA hosted the third in a series of South Asian arms control workshops, this time with a group from Pakistan. (Pakistani and Indian groups have participated separately in previous workshops.) At these sessions, participants have discussed the concepts and techniques of arms control and confidence-building and explored the ways such techniques could be adapted to meet their unique security concerns. ACDA is developing ways to assist India and Pakistan to verify their regional agreements, and continues to stress the importance of adequate verification and monitoring.

Fostering major arms control initiatives in South Asia is a slow process. The ACDA workshops provide an innovative way to engage officials in both countries in discussion of CBMs and arms control. They offer a path to longer-term progress in addressing regional security concerns. At every opportunity, ACDA has provided information to India and Pakistan on the national security benefits of arms control. While in China for arms control consultations, the Director emphasized steps that China could take to help promote stability in South Asia.

ACDA's assessments of and opinions on proposed U.S. arms transfers to the region have been instrumental in maintaining the U.S. policy of restraint. To this end, ACDA is now a voting member of the Pakistan Review Committee, an interagency body which meets monthly to review requests for commercial munitions licenses.

G. MIDDLE EAST

For the past 46 years, Middle Eastern conflicts inhibited the establishment of formal relations between Israel and other governments in the region. There have been few opportunities for arms control agreements, or even for arms control discussions, within this region. Since l991, Israel has been building on its 1979 peace agreement with Egypt by engaging in negotiations with its immediate neighbors and the Palestinians to reach the objective of a comprehensive and durable peace in the region.

As negotiated settlements of the Middle East Peace Process are implemented, we expect that governments will establish relations and expand commercial and social contacts. In this more stable security environment, we can anticipate opportunities for concrete and visible arms control to emerge. We will continue to sponsor and participate in bilateral as well as regional meetings to encourage this process.

ACDA's Role: ACDA seeks to prevent the proliferation of all weapons of mass destruction, their production means, and delivery systems capable of carrying them throughout the Middle East, as well as excessive and destabilizing accumulations of conventional arms. We are pressing for regional compliance with and are encouraging acceptance of the Chemical Weapons Convention, the Biological Weapons Convention, and the Nuclear Non-Proliferation Treaty, all of which, together with progress in the peace process, can set the stage for establishing a zone free of weapons of mass destruction in the Middle East. We also urged states in the region to adhere to the MTCR Guidelines. ACDA's role in the export licensing process for dual-use technology and conventional weapons helps to stabilize the region, where we limit destabilizing acquisitions of such items.

ACDA's more specific activities are described in the following subsections.

1. ARMS CONTROL AND REGIONAL SECURITY WORKING GROUP

As part of the multilateral track of the Middle East peace process, the Arms Control and Regional Security (ACRS) working group was formed in early 1992 under the direction of the Department of State. The ACRS, sponsored jointly by the Russian Federation and the United States, is one of five multilateral groups in the peace process, which complements the bilateral talks between Israel and its immediate neighbors. It is the only such group devoted solely to regional security issues. Thirteen Arab states, Israel, and a Palestinian delegation, together with more than 20 extra-regional entities, participate in plenary meetings to discuss issues related to regional security and direct the work of ACRS.

ACDA's Role: ACDA has been a key participant in the ACRS process since its inception. It has contributed substantively to U.S. efforts to create a regional security center and establish the ACRS communications network, based on its experience with setting up the original CSCE network and as the architect of the new OSCE communications network. ACDA has presented numerous papers and briefings on arms control both to the ACRS working group and governmental and nongovernmental entities from the region. ACDA serves as a main provider of source material both to participants new to arms control and to those wishing to understand the intricate details of specific agreements. It also continues to develop new proposals for confidence-building and arms control measures for consideration by the working group.

ACDA's unique attributes -- historical interaction with regional and extra-regional participants on arms control, negotiating experience on agreements of relevance to the region, and the ability to coordinate ACRS work with other negotiations and the work of other agencies -- enable us to make substantial and sustained efforts in support of regional security in the Middle East.

In addition to direct support for the Middle East Peace Process, ACDA has sought to deepen and expand the expertise of regional parties in arms control, nonproliferation, and confidence-building measures. In January 1996, ACDA, with interagency support, conducted a two-week training course on arms control for Israeli officials new to the subject. Innovative arms control training tools were introduced during the course, including a verification negotiation exercise developed jointly by ACDA and Sandia National Laboratories' Cooperative Monitoring Center. In November 1996, at State Department request, ACDA organized a similar course for officials from Omar and Qatar. Working with the State Department, ACDA plans to hold more of these courses for representatives from the Middle East throughout 1997.

ACDA also sponsored workshops organized by nongovernmental organizations, bringing together regional parties for informal discussions of non-proliferation and confidence-building measures in the Middle East.

2. UNITED NATIONS SPECIAL COMMISSION FOR IRAQ (UNSCOM)

By Resolution 687 (April 3, 1991), the Security Council established the formal Gulf War cease-fire. Beyond elements that pertain to sanctions, compensation, return of seized property and establishment of a well-defined border, the resolution:

Supporting implementation are Security Council Resolution SC Res. 707 (1991), which condemns Iraq for having attempted to obstruct the inspection and verification process and demands full disclosure of its weapons programs, and SC Res. 715 (1991), which approves UNSCOM and IAEA long-term monitoring plans; both resolutions are of unlimited duration.

Arms Control, Disarmament and Nonproliferation Objectives

Provisions of Resolutions 687, 707 and 715 are legally binding on Iraq, having been adopted under Chapter VII of the UN Charter ("Action with Respect to Threats to the Peace, Breaches of the Peace, and Acts of Aggression"). No element of the resolutions is negotiable: Iraq is required to prove to UNSCOM and the Director General of IAEA that it has eliminated all weapons of mass destruction. Repeated inaccurate Iraqi "Full, Final and Complete Disclosures," in all weapons categories, demonstrate that the objectives under Chapter VII have yet to be met.

Status of Activities

Since May of 1991, UNSCOM and the IAEA have conducted nearly 175 inspections, both at Iraqi declared sites as well as at suspect sites designated by UNSCOM. The monitoring system, which encompasses some 250 weapons-related sites, has been in effect for a year and a half. Due in great measure to incomplete declarations, concealment, and the obstruction of inspection teams despite political- level agreements to the contrary, UNSCOM and the IAEA are not yet ready to state with confidence that proscribed items have been accounted for and disposed of. Limited but significant quantities of proscribed missiles, and certain high-quality chemical and biological warfare agents and related capabilities, may remain. Significant questions also remain on Iraqi centrifuge and weaponization programs; the IAEA believes that Iraq retains a comprehensive library of documents relating to its nuclear program.

Significant events during 1996 include:

Prospects for the Forthcoming Year

While suspect-site visits continue, as well as continual monitoring of declared sites, an added emphasis is now being placed on visits to conduct interviews with Iraqis at all levels that were involved in Iraqi weapons of mass destruction programs. Despite political assurances of cooperation, instances of continuing deception remain commonplace. The Export/Import Monitoring Mechanism came into effect on October 1, at which time a Joint Unit was established by UNSCOM and the IAEA to serve as a central repository and clearinghouse for implementation of the mechanism. Notifications of exports of dual-purpose items to Iraq are to be made by both the exporting country and by Iraq. This mechanism is important even before sanctions are lifted in accounting for items which may be imported for medical or humanitarian purposes and yet remain dual-use (e.g. chlorine). With the December 9 approval for SC Res. 986 ("oil for food") implementation, $2 billion worth of oil can now be sold on the world's markets to pay for humanitarian needs as well as financing of Iraq-related UN operations. The implementation of both the Export/Import and Res. 986 mechanisms will be enforced by monitors on the ground in Iraq and elsewhere.

As stated in the Oct. 11, 1996 six-month report by UNSCOM to the Secretary General, "What is primarily required is a dedicated and honest commitment by Iraq, implemented at all levels, to a course of full cooperation and transparency if the stage is to be reached in the near future where the Commission would be able to report that, in its view, Iraq has carried out the actions required of it under Section C of Resolution 687."

ACDA's Role: ACDA continues to provide USG policy and analytical evaluations, to include how efforts in Iraq may affect ongoing arms control activities. ACDA personnel also serve as active participants in the policy formulation group supporting UNSCOM and the IAEA. Various ACDA officials have served since 1991 as UNSCOM Deputy Executive Chairman (2 years); UNSCOM BW site planner/protocol designer (2 years); and as inspectors in Iraq.

3. IRAN

We are very concerned about Iran's nuclear program, and continue to monitor the nuclear activity in that country very closely. Although Iran's rudimentary program has apparently met with only limited success so far, we find that Iran has not abandoned its efforts to expand its nuclear infrastructure to support nuclear weapons development. Judgements about timetables for any country's development of nuclear weapons are difficult to make with precision. In recent years, the U.S. intelligence community has stated publicly that Iran would probably take at least 8-10 years to produce an indigenous nuclear weapons production capability. The most significant factor in reducing this timetable would be critical foreign assistance or acquisition of fissile materials through smuggling.

Through multilateral and bilateral contacts ACDA, working with other U.S. agencies, will continue to urge all supplier countries not to engage in any nuclear cooperation with Iran. During 1996 U.S. efforts focussed on Russia and China, which continue to be Iran's primary source of nuclear-related cooperation.

In high-level meetings with Russia, the United States has repeatedly and strenuously objected to any form of nuclear cooperation with Iran. Although President Yeltsin has publicly stated his opposition to an Iranian nuclear weapon capability, Russia continues to argue that its cooperation with Iran will not materially contribute to a fissile material production capability, and that Iran is complying with its NPT obligations. The administration has established a multilevel dialogue with the Russians and continues to give this issue top priority on the bilateral agenda.

During numerous, high-level meetings with China, the United States has repeatedly raised the issue of nuclear cooperation with Iran. China's plans for providing nuclear reactors to Iran appear to be suspended. However, Chinese nuclear cooperation with Iran continues in a number of areas. China believes that a policy of cooperation in "legitimate" areas of nuclear assistance will help ensure that Iran's nuclear weapons intentions are never realized. We continue to argue that Iran has strong nuclear weapons ambitions and any nuclear cooperation with them contributes to the risk of proliferation.

H. LATIN AMERICA AND THE CARIBBEAN

At the Summit of the Americas in December 1994, the Presidents and leaders of the region envisioned a hemisphere in which democracies would be consolidated, economies would be integrated, and security would be enhanced through dialogue, mutual confidence and transparency. Last year, ACDA actively worked to bring about this hemispheric vision of peace, transparency and stability. ACDA led U.S. government efforts to foster and support regional arms control in Latin America and the Caribbean. This has led to U.S. leadership at the OAS on this issue, greater dialogue among members of the hemisphere, and concrete progress in implementing the Santiago Declaration on confidence- and security-building measures (CSBMs).

1. ORGANIZATION OF AMERICAN STATES (OAS)

The March 1994 Buenos Aires governmental experts' meeting on CSBMs marked the first regional dialogue on CSBMs by the OAS member states. On November 10, 1995, the OAS Conference on CSBMs in Chile issued a "Declaration of Santiago on Confidence- and Security-Building Measures" including a program of action for the hemisphere. The Santiago Declaration charged the Committee on Hemispheric Security with primary responsibility for follow-up and for the production of draft resolutions at the June 1996 OASGA that would recognize progress achieved and take additional steps.

On June 7, 1996, the OASGA meeting in Panama adopted the annual report of the Committee and its seven resolutions. Among the resolutions approved was an ACDA resolution on "Confidence- and Security-Building Measures in the Americas," which established a plan of action for present and future progress on this issue. The resolution requires an annual report from OAS member states on steps they are taking to implement the Santiago Declaration; provision of the United Nations Register of Conventional Arms and Military Expenditures data submissions; and the holding of a one-day meeting on these two United Nations transparency measures. OAS member states also agreed to exchange information on defense policies and doctrines, and to develop and adopt plans for notice of military exercises and invitations of observers. To encourage an exchange of experience in CSBMs with other regions, the resolution calls for an exchange of papers and attendance at meetings held by other international organizations such as the annual implementation meeting of the Organization for Security and Cooperation in Europe.

Since the Santiago Conference on CSBMs, the U.S. Government has organized itself to ensure we will be working to comply and to report annually to the OAS and its member states on our progress of implementing the Declaration of Santiago. An interagency working group headed by ACDA has been created to fulfill this work.

On May 20, 1996, the United States presented to the OAS Secretary General, the chairman of the Committee on Hemispheric Security and the OAS member states the U.S. annual report on steps we have taken to comply with the Declaration of Santiago. In addition, the U.S. included in the report the information conveyed by the United States to the United Nations Register of Conventional Arms for 1995. This year, the U.S. continued its practice of giving in advance notification of significant multilateral exercises in the region.

The U.S. resolution on implementation of the CSBMs of the Declaration of Santiago enjoyed wide support by all OAS member states. The U.S. resolution on CSBMs set the stage for the Defense Ministerial of the Americas (DMA) in Argentina in October and a future high-level OAS meeting on CSBMs in El Salvador.

Both occasions allow the hemisphere to further develop interest in confidence and transparency measures as well as further develop Santiago Declaration measures on a regional and bilateral basis. As further evidence of regional progress in this area, this year ACDA secured regional agreement to consider a legal framework to an advance notification of significant weapons purchases. The DMA will be an opportunity to foster a better understanding of the Declaration of Santiago on CSBMs by the Defense Ministers and the military establishments, which increasingly will be called upon to implement those measures.

2. DEFENSE MINISTERIAL OF THE AMERICAS II

Argentina played host to the Second Defense Ministerial of the Americas in the city of San Carlos de Bariloche on October 7-9, 1996. The three-day conference on defense and security matters furthered the dialogue among Defense Ministers begun in 1995 and hosted by Secretary of Defense William Perry in Williamsburg, Virginia. This year's ministerial addressed peacekeeping operations, confidence- and security-building measures, demining and landmines, counternarcotics and international crime. Among the U.S. initiatives, announced by Secretary Perry, were the establishment of an Inter-American Center for Defense Studies devoted to strengthening civilian expertise in defense issues, a new confidence- and security-building measure of advance notification of acquisition of significant weapons covered by the United Nations Register of Conventional Arms, and an offer to host a workshop on the development of white papers on defense policy and doctrines.

ACDA worked closely with DoD on these policy initiatives in order to continue to generate regional momentum in implementing the Declaration of Santiago on CSBMs. ACDA was also instrumental in fostering better understanding between Defense and Foreign Ministries on the vital role they need to play in the implementation of the Santiago Declaration on CSBMs and on OAS resolutions adopted by the General Assembly on this matter.

3. PERU-ECUADOR

ACDA devoted considerable effort to fostering the development of an arms transparency and restraint mechanism between the two countries in order to avoid an arms race, support the ongoing negotiations on resolution of the border dispute, and serve as a model arrangement for other countries in the region.

In the October 6, 1995, Declaration of the Guarantor Countries of the 1942 Protocol of Rio De Janeiro and the Vice Foreign Ministers of Ecuador and Peru on the Advances in the Peace Process, the parties pledged that "It is essential to avoid the risks of an arms race so as not to undermine the end of hostilities or otherwise damage the peace." On February 23, 1996, Ecuador and Peru agreed: "to form a Working Group made up of officials from the Defense sectors of both countries and by a diplomatic liaison official. Said Group will undertake to design a bilateral mechanism to build confidence between Ecuador and Peru, which contributes to transparency in military acquisitions and to strengthening the climate of security and stability between the two countries." In March, an ACDA official traveled to Lima and Quito to conduct arms control consultation, urge implementation of the Declaration of Santiago, and to offer technical assistance on arms restraint and confidence-building measures.

At U.S. invitation, the Ecuadorian Working Group members and other senior Ecuadorian officials attended an intensive five-day arms control training workshop sponsored by ACDA from June 12-17, 1996. The course was designed to provide the participants with the opportunity to ask questions of many of the U.S.'s leading authorities on the role of arms control in national defense and security. ACDA has offered a similar workshop to Peru.

In November 1996 the Peruvian Mixed Commission indicated they would like to attend the ACDA workshop as well. ACDA is planning to conduct the workshop at a mutually convenient time.

4. SECURITY OF SMALL ISLAND STATES IN THE CARIBBEAN

In 1996 ACDA also contributed to the technical consideration of measures to address growing security concerns in the Caribbean. ACDA helped organize the two-day OAS special meeting on October 17-18, 1996 in Washington to exchange views on the security concerns of small island states. ACDA also began internal studies on how traditional arms control measures could be tailored to address nontraditional security threats such as illegal trafficking and proliferation of small arms.

I. AFRICA

In 1996, ACDA pressed a number of policy initiatives and activities to foster arms control in sub-Saharan Africa. ACDA led U.S. efforts in monitoring and influencing the development of an African Nuclear Weapons Free Zone Treaty to ensure that it conforms to longstanding U.S. criteria for supporting such zones.

In addition, ACDA actively participated in the interagency follow-up integrated long-term plan to support conflict resolution capabilities and demobilization activities in sub-Saharan Africa. This plan was mandated by the 1994 African Conflict Resolution Act.

In recognition of the severe threat posed by trafficking in small arms in Africa, ACDA developed a model protocol for destruction of small arms as one practical measure to support demobilization and disarmament. While there are sizeable inventories of heavy weapons in some African countries, it is the proliferation and wide availability of small arms and light weapons to subnational groups that contribute to local and internal conflicts, which threaten regional stability, fledgling democracies, and fragile economies. Small arms play a central role in African conflicts. Systematic disarmament of former combatants in the context of a political settlement ending a conflict is necessary, among other reasons, to mitigate prospects for resumption of hostilities. A model protocol for the destruction of conventional weapons as part of a military demobilization and disarmament strategy is a first step in facilitating the timely, verifiable destruction of arms for preventing such weapons from becoming a regional destabilizing influence. The model destruction agreement was widely distributed in West Africa.

ACDA continues to compile and publish country data on military expenditures, armed forces, arms imports and exports, and other indicators to foster transparency in the region, and has disseminated this data within the region.

In 1996, ACDA participated in four conferences in Southern Africa, Western Africa and the United States to promote regional arms control in Africa. The UN-sponsored conferences in South Africa and Mali drew on national commission members, customs officials, uniformed services and NGOs, and sought to facilitate a concerted effort to constrain the flow of small arms in the region. In Mali, conferees aimed to build upon the conclusions and recommendations of the United Nation's Secretary-General's Advisory Mission to the Sahara-Sahel for the collection of illicit small arms. ACDA participated in the deliberations and offered arms control experiences for participants to draw upon in addressing their security concerns.

In November, ACDA presented a paper on Arms Control and Conflict Resolution in Africa, at the annual African Studies Association Conference in San Francisco. This paper developed a six-phase model of conflict in which relevant arms control measures, particularly those focussed on weapons and small arms, could be applied at each phase to help prevent, manage, and resolve conflicts and build an enduring peace. This is the first model to articulate and elaborate the application of arms control measures to the export, import, production, and disposition of weapons, as practical means for both supplier states and those affected by conflicts to avert or mitigate hostilities.