April 8, 1994

ADDRESS OF THE HONORABLE JOHN D. HOLUM
DIRECTOR, U.S. ARMS CONTROL AND DISARMAMENT AGENCY
TO A CONFERENCE ON "BOMBS, CARROTS, AND STICKS"
SPONSORED BY THE FOURTH FREEDOM FORUM AND THE
JOAN B. KROC INSTITUTE FOR INTERNATIONAL PEACE STUDIES
AND HOSTED BY THE UNIVERSITY OF NOTRE DAME

I want to thank the University of Norte Dame, the Fourth Freedom Forum, and the Joan B. Roc Institute for International Peace Studies for hosting this conference, and all of you for attending. The subject is both important and difficult to face -- especially at a time when Americans long for respite from challenges abroad, so we can concentrate on our needs at home. But the hard truth is that we need to do both at once.

With the end of the Cold War, some felt that the need for arms control would recede. The Soviet-American arms race is, indeed, over. But paradoxically, the need for arms control has grown. The bipolar nuclear standoff has been replaced by what President Clinton described in the last State of the Union address as "rampant arms proliferation, bitter regional conflicts, ethnic and nationalist tensions in many new democracies ... and fanatics who seek to cripple the world's cities with terror."

How should we respond? First, by realizing that our security means more than protecting the U.S. homeland against a direct military attack. A central element of our strategy of engagement must be to minimize the ability of states outside the circle of democracy and free markets to threaten those who share these values. So long as such backlash states continue to bully their neighbors and undermine stability, we must work to isolate them -- diplomatically, militarily, technologically, and economically.

I've been asked to speak to you this evening about the Administration's approach to the risks of nuclear proliferation. For that reason, I won't focus on our strategy against other weapons of mass destruction, including missiles and chemical and biological weapons. But the approaches and institutions relevant to those weapons are in many respects comparable to those I'll be discussing tonight. And many of the larger principles that guide our uses of incentives in the nuclear area also apply to those other weapons of mass destruction.

I'd like to move tonight from the specific to the general. I'll begin with the main nuclear nonproliferation challenges confronting us today and conclude with our most essential tools for dealing with them successfully.

The Proliferation Threats of the 1990s

We face three distinct proliferation threats today: first, the difficulties arising from the dissolution of the Soviet Union; second, the emergence of several states that are parties to the NPT but whose motivations are suspect -- Iran, Iraq, Libya, and North Korea; and third, the "threshold" states -- Israel, India, and Pakistan -- which are thought to have the capability to deploy nuclear weapons within a short period of time, but have been unwilling thus far to join the Non-Proliferation Treaty regime.

Dissolution of the Soviet Union

The Soviet Union maintained strict internal controls over not only its nuclear weapons and fissile materials, but also over the technical and human resources needed to manufacture and maintain them. When the Soviet Union dissolved, these internal controls were weakened dramatically -- increasing the risk that nuclear weapons could fall into the wrong hands, or that the people who know how to build them would offer their services to eager potential employers in places like Iraq, Iran, Libya, or North Korea.

Dealing with these threats requires both negotiated agreements and technical assistance. A principal U.S. goal has been to promote the safety, security, and dismantlement of nuclear weapons from the arsenal of the newly independent states of the former Soviet Union (FSU), and to ensure that transfers of nuclear materials and technology do not contribute to proliferation.

Full implementation of existing reduction agreements remains critically important -both for their own sake and to avoid the emergence of new nuclear weapon states. For example, the START I Treaty, signed in 1991 by the U.S. and U.S.S.R., mandates reducing the superpowers' strategic nuclear arsenals by approximately one-third. In May of 1992, the states with nuclear weapons on their territories -- Russia, Belarus, Kazakhstan, and Ukraine -- signed the Lisbon Protocol to the Treaty, making them successor states to the START Treaty.

Belarus, Kazakhstan and Ukraine also committed in the Lisbon Protocol to join the Non-Proliferation Treaty as non-nuclear-weapon states in the shortest possible time. Belarus and Kazakhstan have already done so; by recently approving the exchange of START instruments of ratification, the Ukrainian Rada has reconfirmed Ukraine's commitment to do so as soon as possible. We are continuing to work with the Ukrainian government toward that end. Today, seven of the twelve NIS states are NPT parties, and all three Baltic states have joined the NPT.

In the meantime, we have not waited for START's entry into force to begin reducing our forces to START I levels. To date, we have removed over 90% of the total warheads on strategic ballistic missiles whose launchers will be eliminated under START I. All remaining such warheads will be removed by the end of this year. And we have retired all heavy bombers planned for elimination under START I.

Our Treaty partners likewise have begun to deactivate and eliminate forces covered by START I. Russia's nuclear arsenal is being dramatically reduced. And nuclear weapons will be completely eliminated in Belarus, Kazakhstan and Ukraine.

There are carrots involved in this. We are promoting our goals through a substantial program of assistance for the safe and secure dismantlement of nuclear weapons of the former Soviet Union. Over $1 billion has been authorized to aid in establishing effective export control systems, converting military bases to civilian uses, finding alternative opportunities for nuclear scientists and engineers, developing nuclear material accounting and control systems, dismantling strategic nuclear delivery vehicles, and transporting and storing nuclear weapons and their dismantled components.

Some have questioned this assistance, particularly since our relations with Russia have become somewhat more testy. But that makes the aid all the more important. If we all heard on the news about a new defense system that could somehow lock onto several thousand nuclear weapons formerly aimed at the United States -- and take them safely out of circulation -- we'd want it and we wouldn't quibble about cost. Our program of assistance for the safe and secure dismantlement of nuclear weapons in the former Soviet Union is a national security bargain.

Suspect States

I'd like to comment on some of the "suspect states" that are parties to the NPT but whose motivations cause us grave concern.

The nuclear program of Iraq that was dramatically revealed after the Gulf War proved that adherence to the NPT is not by itself a sufficient basis to presume the absence of a proliferation threat.

Under the leadership of Hans Blix, the IAEA has risen to the challenge by strengthening its system of safeguards. The Board of Governors reaffirmed the right of the IAEA to conduct special inspections at undeclared sites, and approved a voluntary program of reporting nuclear exports to the Agency. Analysis of the combined data will enhance the Agency's ability to detect undeclared nuclear activities. And field trials are already underway to test other measures that will provide additional confidence regarding undeclared activities.

Because Iraq committed aggression, it represents the exceptional case where maximum sticks could be applied: a total UN trade embargo, a freezing of assets, and -- as a condition of the cease-fire -- agreement to a totally intrusive regime of inspections by both the IAEA and the UN Special Commission. Of course, such comprehensive measures can be brought to bear only when the international community acts with unanimity and resolve.

Subsequently, in North Korea, the IAEA's inspections have demonstrated to the world its vigilance in pursuing compliance with international safeguards agreements. During the International Atomic Energy Agency's inspections to verify the completeness and the correctness of North Korea's initial declaration, the Agency discovered discrepancies that led it to seek special inspections at undeclared sites.

You are all well aware of what has happened since the IAEA's discovery of discrepancies. The matter is now before the UN Security Council. Our policy remains clear: we seek a non-nuclear Korean Peninsula under a strong international verification regime.

The United States -- acting pursuant to UN Security Council resolutions -- remains willing to enter into broad and thorough talks with North Korea to resolve the nuclear issue and establish the basis for improved economic and political relations. North Korea is being given every opportunity to live up to its commitments.

But we will not begin a third round of talks on the nuclear issue until the IAEA has carried out a full inspection of North Korea's declared nuclear activities and until North Korea has resumed its dialogue with South Korea.

A third suspect state is Iran -- a member of the NPT but also a nation continually engaged in terrorism and hotly in pursuit of nuclear weapons technology. Without outside help, Iran is years away from its goal. We are sparing no effort to deny them that help.

Threshold States

Tensions and mutual suspicions remain high in two other regions, South Asia and the Middle East. In the first, both India and Pakistan could manufacture nuclear weapons within a few weeks of a decision to do so. Both are working on missile systems capable of delivering nuclear weapons -- which would compress warning times to less than reaction times, and thus put a hair trigger on nuclear war. The risk of nuclear war in the event of conflict arguably is greater in South Asia than anywhere else in the world. What India and Pakistan must realize is that a nuclear arms race would bleed their resources and leave them both less secure.

The Deputy Secretary of State, Strobe Talbott, is visiting both countries to urge progress on U.S. proposals designed to address these risks. He is in Pakistan as I speak. The essence of our proposals to India and Pakistan is that they verifiably cap their nuclear programs by agreeing not to produce fissile material for nuclear explosives, and that they participate in multilateral talks aimed at a wide range of security issues of interest to both countries.

I should note that regional arms control activity has increased dramatically in South Asia in recent years. India and Pakistan ratified an agreement not to attack each other's nuclear facilities in 1991 and have discussed other confidence-building measures. They have agreed in principle to establish a multilateral dialogue on regional security and nonproliferation. While still in the planning stage, this dialogue would likely consist of an umbrella group of countries with particular interests in South Asia.

The United States has previously engaged in bilateral discussions with India and Pakistan on these matters. Most recently an ACDA team led by my acting Deputy, Tom Graham, traveled to Islamabad at Pakistan's invitation for arms control consultations.

Regional efforts also hold promise in the Middle East. The Middle East Arms Control and Regional Security Working Group -- co-chaired by the United States and Russia -- is one of five multilateral groups formed after the October 1991 opening round of the Middle East peace process. It is addressing such steps as declaratory measures, verification, a crisis prevention center, information exchanges, and a communications network.

Clearly, progress in this working group will be influenced directly by the pace of events in the overall peace process. All key regional states have supported the idea of a nuclear-weapons-free zone in the region. Such a dramatic achievement clearly is not just around the corner. But by fostering a healthy discussion among long-standing adversaries, this working group has already demonstrated the positive role that confidence-building and other arms control measures can play in promoting regional security

Supply Side and Demand Side Tools

Having discussed the most prominent proliferation risks, let me turn to the tools at our disposal for reducing these risks. You might think of them in two categories -- first, "supply side" tools intended to make nuclear weapons more difficult to obtain, and second, "demand side" tools that lessen their appeal.

Export Control

The primary supply side approach is to control exports of relevant goods and technology. Iraq is a good demonstration of the potential effectiveness of export controls -- not as a means of preventing proliferation entirely, but as a means of burdening and delaying it. Iraq's nuclear weapon program was advanced and dangerous. But despite investing billions of dollars and years of effort, Iraq never acquired the fissile material necessary to manufacture a nuclear weapon.

In a world where advanced technology is widely available, the key to success is multilateral controls. A key factor in Iraq's case was a decision taken by the members of the Nuclear Suppliers Group, or NSG. (Unlike the Zangger Committee, which is the NPT group that implements the export control provisions of the Non-Proliferation Treaty, the NSG is not limited to NPT members, and its guidelines extend to matters not covered in the NPT.) The NSG's decision in the late 1970s to exercise restraint in the transfer of sensitive technologies meant that Iraq was unable to acquire enrichment and reprocessing technologies and had to start from scratch. This greatly delayed Iraq's program.

To further enhance the effectiveness of nuclear export controls, the NSG in 1992 agreed to establish a system of controls over nuclear-related dual-use technologies. The NSG has also instituted guidelines making full-scope IAEA safeguards a condition of supply.

These initiatives -- both led by the United States -- will increase the difficulty of pursuing a nuclear weapons program.

Of course, export controls have to be enforceable. Last year, the Administration endorsed sanctions legislation sponsored by Senator Glenn. This legislation would impose sanctions, for the first time, on foreign firms engaging in prohibited nuclear trade. And with respect to foreign countries, it would both expand the range of conduct that can trigger sanctions and considerably expand the range of sanctions available.

I'd like to underscore tonight the Administration's continuing commitment to export controls as a key element of nonproliferation policy There has been a measured relaxation of controls on dual-use items like computers, based on their widespread availability This does not weaken our nonproliferation commitment, but rather, recognizes the reality that ineffectual controls only dilute our efforts.

The Administration's new draft Export Administration Act both reflects post-Cold War realities and properly balances our competitive interests with our nonproliferation goals. One need not believe that U.S. industry experienced vast burdens as a result of past nonproliferation export controls to be convinced -- as I am -- that the best export controls are those that are accepted and implemented multilaterally. At the same time, I believe the Administration acted wisely in preserving our ability to apply unilateral controls when we need to do so.

CTBT and Fissile Cut-off

On the demand side, the principal tools are agreements to forego nuclear arms. Two initiatives of this Administration relate directly to our nonproliferation goals. One is a Comprehensive Test Ban Treaty (or "CTBT") prohibiting all nuclear tests, anytime, anywhere. The other is a ban on the production of fissile material for nuclear explosives (or "Fissile Cut-off").

Achieving a CTBT is critical to our overall strategy -- a fact underscored earlier this year when I delivered a personal message from President Clinton to the Conference on Disarmament in Geneva. The President's message said that of all the items on the Conference's agenda, "none is more important" than negotiating a CTBT "at the earliest possible time." A permanent ban on testing will provide additional insurance against an arms race between the nuclear powers. And it will stem nuclear proliferation by discouraging other nations from developing their own nuclear arsenals.

We must be clearheaded and candid as to what a CTBT will and will not achieve. It won't in itself prevent development of nuclear weapons as such. But it clearly will help prevent the development of advanced weapons and of smaller, lighter designs. So it erects an additional fence around nuclear ambitions.

Less than four weeks ago, President Clinton again underscored our commitment to negotiate a global ban on nuclear testing when he informed Congress on March 14 that the United States will continue its current moratorium on testing through September 1995. Continuing the moratorium creates the most conducive political setting for negotiating a CTBT. The first round of CTBT negotiations ended in Geneva on March 31 with encouraging progress.

Another fence would be a global convention prohibiting the production of fissile materials for nuclear explosives or outside international safeguards. Such a fissile cutoff would cap the amount of material that parties would have available for nuclear explosives. It could bring the unsafeguarded nuclear programs of non-NPT states under some measure of restraint for the first time. And it would likewise halt the production of plutonium and highly-enriched uranium for weapons in the five declared nuclear-weapon states.

Preliminary consultations on a Fissile Cut-off have begun. We expect it will be formally negotiated at the Conference on Disarmament in Geneva, and that expert-level discussions will be held in Vienna, the home of the International Atomic Energy Agency We enter these talks with initiative, commitment, and serious purpose.

In themselves, the CTBT and the Fissile Cut-off cannot prevent nuclear arms, but they are vitally important steps. They could, for example, effectively cap the programs of countries not yet willing to join the NPT- India, Pakistan and Israel. This would be a meaningful step -- assuring rivals and neighbors that the nuclear programs of member states would proceed no further.

The Non-Proliferation Treaty

This brings me at last to the most important tool of all -- the Nuclear Non-Proliferation Treaty, or NPT.

In broad terms, the NPT constitutes an agreement of non-nuclear states to forego nuclear weapons; an agreement to put peaceful nuclear facilities under international safeguards; an undertaking by the nuclear weapons states to end the arms race and pursue nuclear disarmament; and an agreement providing rights to technical cooperation in the peaceful uses of nuclear energy.

The NPT established a global norm against the further proliferation of nuclear weapons. Once such a norm is formalized in a binding treaty signed by many nations, remaining outside it brings on significant consequences in the form of political isolation. Even though such consequences are "only" political and "only" involve opprobrium in the court of world opinion, they become quite difficult to ignore -- as witness the fact that the NPT has gained more than 160 members, the largest number of any arms control agreement.

The NPT has been a remarkable success. During the 1960's, when it was negotiated, many predicted that there would be 20-30 avowed nuclear weapon states today. In fact, there are only five declared nuclear weapons states -- the same as in 1970, when the NPT was brought into force -- and only the three other "threshold" states that I discussed earlier.

And there has been considerable tangible progress in recent years. China and France have joined the Treaty. South Africa decided to renounce its nuclear weapon program, join the NPT, and accept full-scope safeguards. Algeria has announced its intention to join the NPT. And in Latin America, Argentina, Chile and Brazil have decided that acceptance of global nonproliferation norms is in their interests.

When the Argentines communicated to us last year their decision to join the NPT, the words they used were remarkably germane to tonight's topic. They said that they had long kept open their nuclear option out of a desire to add to their security -- but found that it had the opposite effect of excluding them from participating in the political and economic circles where their true security lies. They told us -- with great emotion -- that they wanted to join the NPT in order "to join the civilized world."

The situation in North Korea demonstrates a global norm at work and an NPT that is working: a decision by North Korea to adhere to the Treaty; an effective verification system; and when non-compliance was detected, referral to the Security Council and increasing international pressure on North Korea to live up to its obligations.

Indeed, the NPT sets the fundamental legal standard and political framework for all the specific cases I have mentioned: for our efforts with Belarus, Ukraine and Kazakhstan -- for encouraging initial steps by India, Pakistan, and Israel -- and for concerted action as to countries, like North Korea and Iraq, that do not respect their agreements.

The NPT is now nearing a very important event in its life. An April 1995 Conference will decide whether the Treaty will be extended indefinitely or for a limited period. That carries with it the possibility that the Treaty could lapse after only a short extension.

Extending the Treaty for a fixed term of years will not work. For one thing, it would not serve the cause of nonproliferation to have countries jockeying for position as the Treaty's expiration date grew near. For another, further extending the Treaty at the end of the fixed period would require its amendment -- a daunting procedural and political hurdle. Make no mistake: 1995 is our one best chance to extend the NPT.

The Clinton Administration is committed to the one outcome that will safeguard the NPT regime -- indefinite and unconditional extension of the Treaty. ACDA, as the lead agency, has been at work for more than two years preparing for the Conference.

Because the stakes are so high, we consider NPT extension our biggest single responsibility over the next year.

Extension of the Treaty will be decided by a majority vote of its parties -- though of course we are seeking the strongest endorsement possible. The votes of the non-nuclear, non-aligned states will be decisive.

What are the arguments? Some complain that the NPT is "discriminatory," because it accepts five nuclear powers and freezes out all others. But remember that the Treaty did not create nuclear weapon "haves" and "have-nots" -- it only recognized that reality, and helped stop a deadly trend in its tracks.

What about the argument that the "have nots" should hold up the NPT for leverage, to make the "haves" pursue disarmament and agree to a comprehensive test ban? Article VI does obligate the nuclear weapons states to pursue in good faith measures related to nuclear disarmament and to ending the nuclear arms race.

We have to concede that at most times over the life of the Treaty, arms control took a distant back seat to the arms race. But today things have changed dramatically. Consider what has been done or agreed:

Taken together, these actions have resulted in something that was unthinkable just a few years ago: nuclear disarmament on a massive scale. Thousands of nuclear weapons are being dismantled every year. The United States alone is dismantling around 2000 nuclear weapons a year, the highest rate that technical limitations will permit. Under START II, in fact, we are committed to reduce nuclear weapons to their 1972 levels. Our making good on this commitment will wipe out twenty years of the arms race.

And the Article VI ledger also has to include the efforts now underway for negotiation of a CTBT and a Fissile Material Cut-off. All these steps demonstrate unmistakably that we are serious about reversing the arms race.

And there is a second, even more basic answer to the leverage question, which is that it is always foolish to gamble with something you can't afford to lose. The NPT's value to the non-nuclear, non-aligned countries is not as a lever, for moving the nuclear states, but as a shield, to ward off regional arms races and nuclear dangers. It is not something the non-nuclear states bestow on us, it is something they need every bit as much as we do -- indeed, even more.

Here is what they take from the NPT:

In sum, for all those whose votes will decide its fate, the NPT is the same as it is for us -- not a source of leverage, but of security; not a poker chip, but a life vest. And we should all join together to preserve it.

Conclusion

I have not directly said a great deal tonight about the theme of your conference. In part that is because defining rules of universal application on the use of incentives is very hard -- and also inadvisable. Even distinguishing what is a carrot and what is a withheld stick -- or what is a stick and what is a withheld carrot -- depends heavily on the context and in the abstract can be all but impossible.

Certainly we should not provide carrots promiscuously to countries that engage in nuclear gamesmanship. To do so could provide an incentive for going to the brink of nuclear weapons capability.

And surely we don't want to batter countries indiscriminately with every stick at our disposal, lest we drive them away in the long term from the circle of democracy and free markets.

President Clinton made an important point when he told the United Nations last fall that preventing the spread of weapons of mass destruction is a central element of U.S. foreign policy. The President declared:

It seems to me that the key -- the "Great Carrot," if you will -- is simply normalcy: normal political and economic relations of the kind described by the President. The best approach is to establish and sustain global and regional norms -- such as the NPT and the various nuclear weapon-free zones -- which define and enforce standards of behavior, and then permit normal economic and political relations for states in compliance with these norms.

In short, you act responsibly, you benefit from full participation in the international community, including both relevant security assurances and thriving commercial relationships. You act irresponsibly, you become an outcast, cut off not only from trade in dangerous commodities, but increasingly from even routine commerce and political participation in the international community. Such pressure can be very strong in a world that is becoming ever more interdependent, ever more tightly bound together by trade, political, communications, environmental, security and other relationships.

As for sticks -- in this context, the worst sticks are simply the burdens of nuclear weapons themselves. By which figure of speech I mean to include not just the political, military and financial costs and dangers of developing and maintaining the weapons themselves, but also the costs and risks attendant to remaining outside the community of responsible nations.

So an NPT that can never expire -- that can be counted on forever -- is keenly in the interest of all countries. Our mission is to make this truth plain to the world. We must succeed in that mission.

Now arms control is my job as well as my mission. So there's nothing particularly heroic or noble about my being here.

But most of you don't have to be here. You're here because you are committed to these issues. You're acting as citizens -- in the very best traditions of our system of deliberative democracy.

I predict that a hundred years from now, Americans will look back and say, of this extraordinary era of ours: they helped turn the madness around; they found ways to start putting the weapons away.

And when they think of people like you, they'll know that our world would not have come as far and as fast toward nuclear sanity as it has without the essential participation -- and prodding -- of all kinds of non-governmental groups, and of citizens like you.

In short, they'll look back on you as heroes. And they'll be right.