Index

51–376 CC
1998
INDIA-PAKISTAN NUCLEAR PROLIFERATION

HEARING

BEFORE THE

SUBCOMMITTEE ON
ASIA AND THE PACIFIC

OF THE

COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

SECOND SESSION

JUNE 18, 1998

Printed for the use of the Committee on International Relations
 

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COMMITTEE ON INTERNATIONAL RELATIONS
BENJAMIN A. GILMAN, New York, Chairman
WILLIAM GOODLING, Pennsylvania
JAMES A. LEACH, Iowa
HENRY J. HYDE, Illinois
DOUG BEREUTER, Nebraska
CHRISTOPHER SMITH, New Jersey
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
PETER T. KING, New York
JAY KIM, California
STEVEN J. CHABOT, Ohio
MARSHALL ''MARK'' SANFORD, South Carolina
MATT SALMON, Arizona
AMO HOUGHTON, New York
TOM CAMPBELL, California
JON FOX, Pennsylvania
LINDSEY O. GRAHAM, South Carolina
JOHN McHUGH, New York
ROY BLUNT, Missouri
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KEVIN BRADY, Texas
RICHARD BURR, North Carolina
LEE HAMILTON, Indiana
SAM GEJDENSON, Connecticut
TOM LANTOS, California
HOWARD BERMAN, California
GARY ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
MATTHEW G. MARTINEZ, California
DONALD M. PAYNE, New Jersey
ROBERT ANDREWS, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
CYNTHIA A. McKINNEY, Georgia
ALCEE L. HASTINGS, Florida
PAT DANNER, Missouri
EARL HILLIARD, Alabama
BRAD SHERMAN, California
ROBERT WEXLER, Florida
STEVE ROTHMAN, New Jersey
BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
JIM DAVIS, Florida
LOIS CAPPS, California
RICHARD J. GARON, Chief of Staff
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MICHAEL H. VAN DUSEN, Democratic Chief of Staff

Subcommittee on Asia and the Pacific
DOUG BEREUTER, Nebraska, Chairman
JAMES A. LEACH, Iowa
DANA ROHRABACHER, California
PETER T. KING, New York
JAY KIM, California
MATT SALMON, Arizona
JON FOX, Pennsylvania
JOHN M. McHUGH, New York
DONALD A. MANZULLO, Illinois
EDWARD R. ROYCE, California
HOWARD L. BERMAN, California
ENI F.H. FALEOMAVAEGA, American Samoa
ROBERT E. ANDREWS, New Jersey
SHERROD BROWN, Ohio
MATTHEW G. MARTINEZ, California
ALCEE L. HASTINGS, Florida
ROBERT WEXLER, Florida
MIKE ENNIS, Subcommittee Staff Director
RICHARD KESSLER, Democratic Professional Staff Member
DAN MARTZ, Counsel
HEIDI L. HENNIG, Staff Associate
C O N T E N T S

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WITNESSES

    Hon. Karl F. Inderfurth, Assistant Secretary of State for South Asian Affairs, U.S. Department of State
    Hon. Robert J. Einhorn, Deputy Assistant Secretary of State for Nonproliferation, U.S. Department of State
    Hon. David L. Aaron, Under Secretary for International Trade, U.S. Department of Commerce
APPENDIX
Prepared statements:
Hon. Gary L. Ackerman, a Representative in Congress from New York
Hon. Sherrod Brown, a Representative in Congress from Ohio
Hon. Karl F. Inderfurth
Hon. David L. Aaron
Additional material submitted for the record:
Fact sheet on India and Pakistan sanctions submitted by Hon. Karl F. Inderfurth
FDIC fact sheet on India and Pakistan sanctions submitted by Hon. Karl F. Inderfurth
Communiques on India and Pakistan's actions submitted by Hon. Robert J. Einhorn
Questions submitted for the record by Hon. Doug Bereuter, a Representative in Congress from Nebraska
INDIA-PAKISTAN NUCLEAR PROLIFERATION

THURSDAY, JUNE 18, 1998
House of Representatives,

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Subcommittee on Asia and the Pacific,
Committee on International Relations,
Washington, DC.
    The Subcommittee met, pursuant to notice, at 2 p.m. in room 2172, Rayburn House Office Building, Hon. Doug Bereuter (chairman of the Subcommittee) presiding.
    Mr. BEREUTER. The Subcommittee will come to order.
    Today our hearing is entitled: India and Pakistan, the implications of nuclear proliferation in South Asia.
    On May 11th, India stunned the world by exploding a series of nuclear devices. Less than 3 weeks later, on May 28th, Pakistan responded with tests of its own. Together, as many as 11 nuclear devices were detonated—the actual number is difficult to determine—and the political aftershocks are still being felt.
    While there were celebrations in the streets of Delhi and in the streets of Islamabad, the rest of the world has responded with dismay. Some observers have suggested that the recent tests brought the world closer to the nuclear brink than at any time since the Cuban missile crisis. Whether this is true or not, certainly the tests have caught the attention of the international community and Capitol Hill.
    There are those in South Asia who insist their nuclear capability makes the region more stable and that the situation is roughly analogous to the U.S.-U.S.S.R. nuclear balance during the cold war. However, I would argue that the nuclear balance between India and Pakistan is far less stable than that which existed between the United States and the Soviet Union.
    During the cold war, America and the U.S.S.R. had large nuclear arsenals, but they were separated by 10,000 miles. India and Pakistan on the other hand have a long border with important parts of it contested. In addition, where the United States and the Soviet Union have never actually fought a war in fact—and were allies during World War II—India and Pakistan have fought three wars in the past 50 years. And the warning time for an attack is almost nonexistent.
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    I am very concerned about the degree of strategic instability that the recent nuclear testing may have introduced into South Asia. I am particularly concerned that South Asia is rushing headlong toward a militarily significant nuclear capability without thinking through questions of command and control and the problems of unauthorized or accidental launches.
    The United States and Soviet Union spent many hundreds of billions of dollars on redundant fail-safe procedures to prevent accidental or unauthorized launches. India and Pakistan, on the other hand, have scant resources to devote to such safeguards. Moreover, the quality of information and intelligence available to South Asian decisionmakers is uneven. For example, it seems that Pakistan may have rushed to conduct its second round of tests because of widespread rumors of impending attack, possibly from India, possibly from Israel. In a situation where there is such a level of distrust, the absence of good information can be devastating.
    Clearly, the West's existing nonproliferation policy has failed. Over the past several decades we have created a series of interlocking multilateral organizations that were designed to prevent the flow of nuclear technology and prevent the spread of weapons of mass destruction. The Comprehensive Test Ban Treaty, CTBT, the Nuclear Nonproliferation Treaty, NPT, and the Nuclear Suppliers Group, the Zanger Committee, which limits the exports of nuclear technology, the Missile Technology Control Regime, MTCR, and the Chemical Weapons Convention, and a host of other organizations were designed to prevent precisely what has occurred in this specific area of weaponry.
    These institutions failed to limit the spread of nuclear weapons, at least ultimately they failed in the case of India and Pakistan; and now the United States is ready to re-evaluate the situation, I hope.
    As you know, the sanctions in the Arms Export Control Act are explicit and the President has no option but to impose sweeping sanctions on both India and Pakistan. That was well known by India and Pakistan. These sanctions include a prohibition of foreign aid, with the exception of humanitarian aid, suspension of trade promotion programs, opposition to new loans in international financial institutions, and a halt to U.S. commercial banking activity.
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    Secretary Albright has noted sanctions, particularly unilateral sanctions, are not particularly effective. Certainly it would be preferable to have carrots to complement the stick of sanctions.
    What the carrots might be is still an open question. I am no fan of sanctions, although their occasional use is justified by the circumstances. In fact, I am one of the original sponsors of the Lugar-Hamilton-Crane-Bereuter antisanctions bill. It seems to me the international community should be working to ensure that the fledgling nuclear arsenals in Asia should be helping protect against nuclear accident or unauthorized nuclear launch. However, it is amazing to me, but doing this, I am told, would violate the Nonproliferation Treaty. Thus, the existing arms control regime presents us with a dilemma.
    The Subcommittee is privileged to have an outstanding panel of Administration witnesses to discuss these pressing issues before us today.
    Assistant Secretary for South Asia, the Honorable Karl Inderfurth is the senior State Department official with responsibility for issues relating to India and Pakistan. He made an official visit to South Asia only days before the first nuclear detonation.
    Accompanying Secretary Inderfurth is Deputy Assistant Secretary Robert Einhorn, the Administration's senior arms control negotiator, giving Secretary Einhorn a brief respite from his normal fare of testifying on China issues, which he has done frequently before this Committee.
    Last, we welcome the Honorable David Aaron, Under Secretary of Commerce for International Trade Administration. Ambassador Aaron previously served as the U.S. representative at the OECD in Paris.
    Perhaps, Mr. Ambassador, you can enlighten the Subcommittee on precisely how the sanctions are to be implemented and what is included in the long-awaited regulations that the Administration is now preparing.
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    Gentlemen, consistent with the practice of the Subcommittee, your entire statements will be made a part of the record. However, I would ask if you could limit your oral remarks to no more than about 10 minutes each in order to allow maximum time for questions.
    But before that, I would like to turn now to my distinguished Ranking Member, the senior Democrat on the Subcommittee, the gentleman from California, Mr. Berman, for opening remarks.
    Mr. Berman.
    Mr. BERMAN. Thank you, Mr. Chairman. Once again you show your knack for timely hearings on critically important issues, and I congratulate you for holding this hearing and for convening these witnesses who, I think, will be able to help us understand better just what the Administration is planning and how they view the situation that has developed in South Asia as a result of the nuclear tests.
    I am not going to present an opening statement, in part to save time, but in part because I am not sure what I would say if I had to present an opening statement.
    The issue of sanctions generally is a complicated one. I probably have a little more admiration for them than you might, but there is no doubt that the failure to get the kind of Western Alliance focus on responses to these kinds of situations that we used to get, not always so easily in the context of the cold war, reduces their effectiveness. At the same time, our own credibility is at stake when we pass a law, the President signs it, and it becomes our policy, if we don't follow that law and don't implement it.
    What does it say to others who might contemplate similar actions? So with that comment, I will yield back to hopefully get right to the hearing.
    Mr. BEREUTER. Thank you very much, Mr. Berman. We will do exactly that.
    Mr. Secretary, Secretary Inderfurth, you may proceed with your testimony as you wish.
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STATEMENT OF THE HONORABLE KARL F. INDERFURTH, ASSISTANT SECRETARY OF STATE FOR SOUTH ASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. INDERFURTH. Thank you very much, Mr. Chairman.
    Mr. Chairman, Congressman Berman, Members of the Committee, I last appeared before this Subcommittee 8 months ago on October 22, 1997. The focus then was on our efforts to expand and enhance our relationship and engagement in the South Asian region, emphasizing our cooperative interaction with India and Pakistan on such matters as trade and investment, science and technology, the environment and health.
    Since that time, the landscape in South Asia has changed dramatically for the worse. On May 11, 1998, events in the region took a decidedly dangerous turn when India tested a series of nuclear devices leading to a reciprocal series of tests by Pakistan and the imposition of far-reaching sanctions against both countries by the United States.
    The international community joined the United States in condemning these actions, which present a serious challenge to the global regime, heightening concerns about regional stability and raising considerably the stakes of Indo-Pakistani tensions. In the 6 weeks that have passed since India tested we have worked assiduously to collect the necessary information, put in place the needed mechanisms and make the requisite decisions to establish the sanctions regime against both India and Pakistan.
    We have endeavored to ensure that the implementation of sanctions under the Glenn amendment and other legislative authorities is firm and correct and that the sanctions are costly to the governments who took these steps, but do not undercut efforts to meet basic humanitarian needs or unduly harm the interests of U.S. businesses.
    In doing so, we are sending a strong message to any other state aspiring to be a nuclear weapons state. At the same time, we wish to underscore that the purpose of these sanctions is to influence the behavior of both India and Pakistan, not simply to punish for punishment's sake.

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    We don't wish to isolate either country, but rather to encourage both to demonstrate a firm commitment to global nonproliferation norms and to improve their relationship with one another. Deputy Secretary Strobe Talbott is conducting a meeting right now at the State Department to announce officially the major guidelines for our sanctions regime. The gist of his announcement is contained in a fact sheet describing the sanctions effort which I will provide to you and which I ask be inserted into the record.
    [The information referred to appears in the appendix.]
    Mr. INDERFURTH. In addition, the relevant U.S. agencies and departments, including the Departments of Treasury, Commerce and Defense, to name just a few, are developing detailed papers on the technical aspects of the sanctions. We will provide you these papers as soon as they are available.
    [The information referred to appears in the appendix.]
    Mr. INDERFURTH. Within the State Department Under Secretary of State for Economic, Agricultural and Business Affairs, Stu Eizenstat, and Acting Under Secretary for Arms Control and International Security Affairs, John Holum, will continue to have the lead with respect to the economic and national security aspects of our sanctions policy.
    As an aside, Mr. Chairman, and very much related to your remarks and those of Congressman Berman, one outcome of our deliberations over implementation of sanctions was a clear recognition that these mandatory sanctions were meant primarily as a deterrent. We hoped they would never have to be implemented.
    We had to navigate our way through a wide array of issues and decisions about how the sanctions applied to different programs and activities, and are faced with the fact that the sanctions may result in unintended negative consequences, and that there is no termination or sunset clause.
    While we have yet to see the kinds of concrete steps by either India or Pakistan that would allow us to move forward, I would point out that we are significantly constrained in our ability to respond to any future progress or positive steps by either country. We also have little flexibility to modify their application in the event there is an unintended negative outcome to their implementation. Already we are aware that the sanctions include the termination of credits for agricultural sales, which is clearly at odds with the humanitarian provisions of the legislation.
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    Mr. Chairman, let me briefly turn to recent developments. In the immediate aftermath of the tests by India and Pakistan, we became quite concerned about the tense atmosphere in the region and by provocative statements and actions by the officials of both countries that appear to be intended solely to stir the pot. In that kind of environment there is an increased capacity for one-upmanship or miscalculation with potentially devastating consequences. That being the case, the United States—with the President and the Secretary of State in the lead—pressed both governments and energized the international community in an effort to lower tensions. We have noticed in recent days a cooling of the rhetoric from both Islamabad and New Delhi and have seen calls from both capitals to resume direct dialog. Both have declared a moratorium on further nuclear testing and have taken a more cautious line on future developments regarding their nuclear and missile programs.
    India has made positive statements about a willingness to participate toward a Fissile Material Cutoff Treaty. We hope Pakistan will follow suit. Though we recognize that reestablishing direct senior-level contact may take more time than we would prefer, we believe it is very important that both sides strike a more responsible tone in their public pronouncements and we are urging them to do so.
    In addition to our continuing efforts to deal with the crisis, to stave off further tests and to encourage the cessation of provocative statements and actions, we are also making a concerted effort to lay the groundwork for halting a nuclear missile arms race in the region and to address the underlying causes of tension between the region's two main antagonists. Again, we are working actively on this effort with the international community, as it is critical that we involve a wide array of governments, institutions and organizations. Already two important international meetings have taken place in which the Secretary of State participated and which I attended, one with the five permanent members of the U.N. Security Council in Geneva, the other with counterparts in the G–8 in London. Both meetings made significant progress in identifying a common approach on how to contain the crisis and prevent further tests and slippage into an all-out arms race and, more fundamentally, how to reduce tensions between the two parties and bring them into the fold of global nonproliferation norms.
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    In addition, the U.N. Security Council approved a strong resolution which endorsed the P–5 communique and sent a firm message in line with the P–5 and G–8 approach. I have provided the Committee with copies of the communiques from both meetings and ask your permission they be inserted into the record.
    Mr. INDERFURTH. Mr. Chairman, let me turn now to the road ahead.
    As I suggested earlier, we cannot simply impose sanctions, step away and send the signal to India and Pakistan that our sole intent is to punish. We must remain engaged, and while sanctions will indeed exact a price, we must also work with both governments to chart a path for the future. That future ideally would produce concrete results in actions by both governments to demonstrate a strong commitment to nuclear and missile restraint and to reducing regional tensions. These actions should include signing and ratifying the CTBT without conditions, refraining from missile tests and agreeing not to weaponize or deploy missile systems, halting production of fissile material and participating constructively in negotiations toward a Fissile Material Cutoff Treaty, formalizing existing pledges not to export or transfer nuclear and ballistic missile technology or expertise, and for the sake of regional stability and prosperity, resuming direct dialog to address the root causes of tensions, including Kashmir.
    The United States has a strong interest in keeping open the lines of communication with both India and Pakistan. Deputy Secretary Talbott met last week at the State Department with Jaswant Singh, Deputy Chairman of the Indian Planning Commission and close advisor to Prime Minister Vajpayee. Their meeting was described as constructive, covering the entire range of issues of mutual concern.
    In plainer language, after a hiatus of 6 weeks, the United States and India are talking again at a high level to see where we can go. We are now working to arrange a similar meeting with a high-level Pakistani envoy.
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    Mr. Chairman, the United States must also work aggressively to keep the international community focused and working productively on these matters. The P–5 and G–8 meetings were not a one-shot deal, and we will continue to work within these institutions and to encourage other nations and organizations to be involved.
    It will be important, for instance, to work with countries that have the ability, but forswore it, to acquire nuclear capabilities such as Argentina, Brazil, Ukraine and South Africa. These countries were invited to join the G–8 for a luncheon at the London meeting, along with China and the Philippines. We intend to work with Germany and Japan, two countries whom we are actively supporting for permanent membership in the U.N. Security Council, and which did not acquire their world power status by testing nuclear weapons.
    We will remain focused on regional and security institutions such as NATO, ASEAN, the OAS, and the membership of the NAM, to name just a few. We will continue to take advantage of our vast array of bilateral exchanges, such as we have done with the visit by the French Prime Minister to Washington and with President Clinton's upcoming trip to China.
    This type of engagement will be necessary to demonstrate continued international resolve, to provide India and Pakistan with examples of the rewards of alternative courses of action, and to ensure continuity of message to both countries. By way of example, we have taken advantage of the meetings held thus far to garner international consensus behind an approach to both India and Pakistan within the international financial institutions which comports well with our own approach under the sanctions regime.
    The G–8 will continue to work collectively to support postponement of loans to both countries for any purpose other than meeting basic human needs. In the case of India alone, more than $1 billion worth of loans have been postponed thus far, which is having a ripple effect in the Indian economy and is resulting in decreased investor confidence. This is not something, I hasten to add, that we envisioned in our interaction with India that I referred to at the beginning of my testimony. Our hope had been to build a strong economic relationship with both India and Pakistan, based on increasing levels of trade and their requirements for infrastructure and other investment. These hopes have been dealt a severe blow. I am sure Under Secretary Aaron will be able to elaborate on that.
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    Mr. Chairman, to conclude, for our part and for the foreseeable future, we must continue to implement firmly our sanctions policy. At the same time, we must be prepared to help both India and Pakistan reduce tensions if they are prepared to do so. The United States and our partners in the P–5 and G–8 have pledged to fulfill our obligation to prevent destabilizing transfers of arms and technologies to South Asia. We stand ready to share our expertise and capabilities to help India and Pakistan to monitor military activities and avoid miscalculation, and above all, to assist the two in settling their differences.
    We look forward, for example, to the upcoming meeting of the South Asian Association for Regional Cooperation, known as SAARC, which will occur in Colombo in July and could provide an opportunity for Prime Minister Vajpayee and Prime Minister Sharif to hold face-to-face talks.
    We urge the two Prime Ministers to seize this opportunity to adopt and announce confidence-building measures or other areas of agreement between them.
    Finally, I would like to make a fundamental point. While we do not accept the rationales given by India and Pakistan for testing or possessing nuclear weapons and believe that the tests have diminished their security, we must continue to recognize that as sovereign states, both India and Pakistan have legitimate security concerns and interests and we must bear that in mind as we move forward. We have far too many national interests at stake to do anything other than engage under these terms.
    Thank you, Mr. Chairman. Along with my colleague from the State Department, Mr. Einhorn, I am ready to answer your questions after you have heard from Under Secretary Aaron.
    Mr. BEREUTER. Thank you very much, Mr. Secretary. The several items to which you referred and requested be made part of the record, without objection, will be made a part of the record.
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    Hearing no objection that will be the order.
    [The information referred to appears in the appendix.]
    Mr. BEREUTER. Observing our protocol, we should call next on the Under Secretary for International Trade, U.S. Department of Commerce, Mr. Aaron.
    Ambassador Aaron—unless you prefer to have Mr. Einhorn go ahead of you. With only three witnesses, I see no reason why we can't follow this procedure. I will call on you at this point.
    Mr. AARON. I will yield to my colleague from the State Department.
    Mr. BEREUTER. Thank you for your courtesy. We will then hear from the Honorable Robert J. Einhorn, Deputy Assistant Secretary of State for Nonproliferation.
    Mr. Secretary, you may proceed.

STATEMENT OF THE HONORABLE ROBERT J. EINHORN, DEPUTY ASSISTANT SECRETARY OF STATE FOR NONPROLIFERATION, U.S. DEPARTMENT OF STATE

    Mr. EINHORN. Thank you, Mr. Chairman. I thank Under Secretary Aaron for allowing me to speak, but I don't have a prepared statement. Assistant Secretary Inderfurth's statement covers my issues quite well. But I am prepared to answer any questions you have later on.
    Mr. BEREUTER. Very well, I appreciate the mutual courtesy here.
    Ambassador Aaron, you are on. Please proceed.

STATEMENT OF THE HONORABLE DAVID AARON, UNDER SECRETARY FOR INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE

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    Mr. AARON. Thank you, Mr. Chairman, and I thank you for holding this hearing, because this is obviously an extremely important issue, and it is important that we have an opportunity not only to brief Congress, but also the public, as well.
    As Secretary Inderfurth indicated at the outset, the State Department is, as we speak, in the process of briefing the press on some of the decisions that have been taken in regard to the implementation of all of this, and so, therefore, my remarks necessarily are preliminary and have to defer to the details being elaborated at that place.
    Sanctions are being implemented basically in accord with U.S. law in a manner which we hope will positively affect the behavior of the Indian and Pakistani Governments while minimizing the damage to the people of those countries and to U.S. commercial interests.
    Trade and commerce will continue with both India and Pakistan. The sanctions and the climate created by the sanctions will inevitably affect U.S. companies. The sanctions will preclude export of selected items and the ability of the U.S. Government to provide important financial assistance and support to U.S. companies. This financial support has been crucial in helping U.S. companies to develop projects in key infrastructure areas. Until implementation of the sanctions is well under way, it will be difficult to determine the precise impact on U.S. business, but I can give you a sense of what the initial impact might be.
    Transactions approved by Ex-Im Bank, legally binding contracts of OPIC, and the Trade Development Agency prior to May 13th for India and May 30th for Pakistan will be honored in accordance with applicable law.
    I will outline what the Bureau of Export Administration is doing to implement sanctions and discuss our trade and commerce with India and Pakistan, highlighting the activities and programs of U.S. Government agencies that will be affected by these sanctions.
    As far as the Commerce Department's Bureau of Export Administration is concerned, the exports of dual-use items controlled for nuclear or missile nonproliferation, will be denied to all end users in India and Pakistan with few exceptions. The United States will also deny sales to a published list of Indian and Pakistani Government entities involved in nuclear and missile programs and military activities.
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    Favorable consideration will continue to be given on a case-by-case basis to other dual-use exports, U.S. business relationships and other arrangements providing benefit to the United States with private and public Indian and Pakistani entities.
    Bilateral trade and investment ties have increased significantly with India since 1991 when that country embarked on a significant market opening and liberalization. In fact, the United States has become India's largest trade and investment partner. In 1997, U.S. exports to India were valued at $3.6 billion, while U.S. imports from India totaled $7.3 billion.
    The ability of U.S. companies to respond to these new opportunities in India has been helped by the International Trade Administration's trade promotion and advocacy activities. It remains to be seen how effective and active the Commerce Department's trade and promotion and advocacy activities can be in this new environment.
    U.S. company activities in India and Pakistan have benefited significantly from financial support promised by the Eximbank, the Overseas Private Investment Corporation, and the Trade Development Agency, TDA. Last year, for example, the Eximbank extended over $300 million of loan guarantees and insurance to U.S. sales in India.
    U.S. companies' ability to pursue projects in India will be diminished without U.S. Government financial support. Certainly suppliers and investors in other countries whose governments have not imposed comparable sanctions will inevitably benefit. The relative insularities of the Indian economy, combined with the United States being the only country to impose sanctions, will not cripple India's economy and economic development. Nevertheless, sanctions will have a significant effect, especially if we can sustain a coalition opposing any new financing by the international financial institutions. Already, they are reducing exposures in Indian markets because of economic uncertainty following the imposition of sanctions and the June 1 announcement of India's disappointing new budget.
    The sanctions on Pakistan are the same as those imposed on India. However, the impact on Pakistan has the potential to be much more severe because of Pakistan's daunting economic problems. Last year, U.S. exports to Pakistan were $1.23 billion and imports were $1.44 billion.
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    We are the second largest supplier to Pakistan's substantial markets, after Japan, and the largest destination for that country's exports. Our commercial relations with Pakistan were constrained by earlier proliferation-related sanctions in the early 1990's, which shut down both OPIC and TDA activities. Eximbank was largely absent also for a recent period, for commercial reasons. But all three have reentered Pakistan earlier this year.
    The Commerce Department is alerting U.S. companies to recently imposed foreign exchange control situations and other government measures. The overall impact will be troubling to companies, particularly those in the power generation sector that have made substantial financial commitments in Pakistan.
    Mr. Chairman, that completes the oral summary of my written remarks, which are submitted for the record.
    [The prepared statement of Mr. Aaron appears in the appendix.]
    Mr. BEREUTER. Thank you very much, Mr. Under Secretary. The Subcommittee will proceed under the normal 5-minute rule. We were hoping that in fact the lights would be working, but they are not. We need to have some technical assistance, I would guess.
    I will start with questions about something I referred to in my opening remarks, and that is whether or not, as signatories to the Nonproliferation Treaty, we are under some limitations as to the kind of technical assistance and tactics and technology we might share with India and Pakistan, which would help them prevent an unauthorized or accidental launch, a fail-safe mechanism or technique.
    Can anyone address that? Is that report correct?
    Mr. INDERFURTH. Mr. Chairman, I would like Mr. Einhorn to join me in this, but I think you have touched on one of the issues that is of most concern to us that by the tests that India and Pakistan undertook in May, they have crossed a very important threshold, a very dangerous threshold in terms of the development of their nuclear weapons capability. There are other thresholds yet to be crossed, including weaponizing, including inducting those weapons into the armed forces, including deployment of ballistic missiles with nuclear weapons.
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    After that threshold is crossed, the remaining threshold is use of nuclear weapons, which is the most catastrophic of those that can be crossed. We are very concerned that the two countries are marching in a direction that they are not prepared for.
    We have had long experience in this country, sometimes painful experience, of nuclear weapons control. We have had instances in our history, including the Cuban missile crisis, where we stepped up to a very dangerous line.
    There are a whole series of steps that need to be taken by these two countries to make certain they don't approach that, and that is something that we hope that they will give great attention to, especially, by stopping right now, halting in their tracks, their nuclear weapons programs.
    I would like to ask Mr. Einhorn to comment on some of those points.
    Mr. BEREUTER. Secretary Einhorn.
    Mr. EINHORN. We, of course, want to limit and reduce the prospects of war by miscalculation, Mr. Chairman, by inadvertence in South Asia or anywhere else. And if appropriate confidence-building measures would reduce the prospect of the outbreak of conflict, we would be prepared to provide any assistance the parties would request of us. But in this particular case, it is very important that we not assume by our actions that the parties are determined to cross certain thresholds that Secretary Inderfurth referred to.
    We don't want to encourage them to cross those thresholds by the kind of assistance we are prepared to give to them. We should be working with them to try to persuade them that it is in their best interests to avoid crossing those thresholds.
    Mr. BEREUTER. If, despite our best efforts, they cross those thresholds and we are at a point at which we think they ought to have additional assistance to avoid accidental or unauthorized launches and to have adequate control, are we under any prohibitions as signatories to the treaty that would prevent us from sharing that technique or technology?
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    Mr. EINHORN. As Nonproliferation Treaty parties, we cannot assist any non-nuclear weapons states to acquire nuclear weapons. So any assistance—there is a wide range of activities and assistance that can be provided, but it is important not to get ahead of the situation here.
    Some of the statements made by India and Pakistan have been positive in terms of willingness to accept certain restraints and not to cross certain thresholds. We should be placing our priority on that at the moment.
    Mr. BEREUTER. I understand, but are we under limits? We could not do certain things at given stages after thresholds are passed, even though we are doing our best to prevent those thresholds from being passed, but we cannot, as signatories, do anything?
    Mr. EINHORN. We would have to look specifically into what you may have in mind. Even in terms of declared nuclear weapons states, the original five nuclear weapons states, we would be under certain restrictions in terms of what we could do and what we would want to do as a matter of policy.
    Mr. BEREUTER. This may be a question for Ambassador Aaron or perhaps for Secretary Inderfurth. One of our colleagues on the Appropriations Committee, through the Subcommittee and now Full Committee, has successfully worked an amendment which would exempt India and Pakistan from being subject to sanctions on our export of agricultural commodities; and upon questioning from the senior Democrat Member of the Committee, he produced, as I understand it—he told me directly—a letter from Sandy Berger, National Security Adviser, indicating that, one, the Administration had no opposition, and that, two, they supported the elimination of that sanction.
    For this Member, for example, it meant, he said, a half billion dollars on sales of wheat to Pakistan from his home state alone.
    Could you enlighten me on this issue?
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    Mr. INDERFURTH. Mr. Chairman, I can and I will turn to Under Secretary Aaron on that, but I want to add one thing about your previous question because it is something we have given a great deal of thought to. And indeed at the P–5 meeting in Geneva of the nuclear weapons states, that issue was discussed not formally, but informally.
    One example of what we can do, and indeed that we have already suggested before the test took place on May 1 when the Foreign Secretary of India was in Washington and met with Under Secretary Pickering and others of us at the Department. After he met with Under Secretary Holum, I escorted him and Ambassador Chandra to the Nuclear Risk Reduction Center in the Department, which was set up as a result of the START agreements. And there in this rather sterile but computer-filled room is the reduction center which is trading information according to the provisions of START, which is expressly for the purpose of making certain that communications take place, so there is not a misunderstanding or miscalculation. I think those are the kinds of areas, nuclear risk-reduction measures, confidence-building measures that we can do that would not be prohibitive, but there are other measures that would fall under the NPT realm.
    Mr. BEREUTER. Thank you.
    My time is just about to expire so, Ambassador Aaron, if you could respond to my second question.
    Mr. AARON. I will do my best, which will probably not be very satisfying. This, I believe, relates to CCC credits or guarantees regarding our food exports.
    I will have to——
    Mr. BEREUTER. It is like a GSM.
    Mr. AARON. I will have to get back to you to see what the status of that is.
    Mr. BEREUTER. I would appreciate it if you would share that with the Committee.
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    [An exchange between Mr. Bereuter and Mr. Aaron (page 31, lines 1797–1816) clarifies that this information can be found in the submitted ''Fact sheet on India and Pakistan sanctions.'']
    I got a late start on the lights, so I turn to my colleague, under the 5-minute rule, to Mr. Berman.
    Mr. BERMAN. Thank you, Mr. Chairman.
    I have the advantage or the disadvantage of having two separate fact sheets on India and Pakistan sections issued by the Administration. It is always fun when you get that to look for the differences.
    Mr. INDERFURTH. Pay attention to the last one you received. It is the up-to-date version, and we apologize.
    Mr. BERMAN. Are there differences between the two?
    Mr. INDERFURTH. Slight. You would have to read them closely.
    Mr. BERMAN. They are interesting.
    On the issue that the Chairman just raised—both copies say the Administration will support legislation to permit CCC credits for food and agricultural commodities.
    I am not sure what the other program was the Chairman mentioned, but I don't come from an agricultural district, so——
    Mr. INDERFURTH. To help clarify, both fact sheets on that point are correct. We do support that. These were decisions that had been made even as we have approached this hearing; and again, because of the nature of the Glenn amendment sanctions, meetings have been held since the imposition of those sanctions by the President and a lot of these issues are just being clarified at this stage. That fact sheet is correct. There is Administration support for that.
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    Mr. BERMAN. The most interesting one is that on the earlier one you suspended most military aid and military programs to include certain ongoing educational programs and official exchange visits; but on the recent one you reinstated them—I don't know that, but the severance is not there.
    Mr. INDERFURTH. There is reference to case-by-case review. The IMET programs are suspended according to the Glenn amendment. There is a desire on the part of our Defense colleagues to maintain appropriate and acceptable links with their military counterparts, so what we have——
    Mr. BERMAN. These are JCET programs?
    Mr. INDERFURTH. I would have to get back to you on the specifics of which programs they are referring to. But these are guidelines for how we will approach our military-to-military relations, which we want to make certain are consistent with Glenn amendment requirements, and again we can provide additional information on that.
    Mr. BERMAN. Then the last portion of it, which gets into export controls—and I don't know to what extent this is Mr. Einhorn's, both Einhorn's and Commerce's area—we ''will deny sale of dual-use export items controlled for nuclear or missile reasons.''
    What exports were we not denying licenses to, to both India and Pakistan—what exports were we allowing that would fit into the export controls list for nuclear or missile items before this decision?
    Mr. EINHORN. One example, this would deny any item on a nuclear control list or dual list. There are many items on the dual-use list that have non-nuclear applications, and if they were going to a non-nuclear end user and we were confident of that, we would be entitled to go ahead with the export.
    This is essentially an embargo on all listed items to India, listed on the nuclear lists.
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    Mr. BERMAN. What if they are—well, the second sentence says, we ''will presume denial for all other dual-use exports to entities involved in nuclear or missile programs.''
    What is the difference between your two sentences? I know what the difference is, one is ''deny'' and the other is ''presume denial.'' What is the difference between those two different dual-use lists?
    Mr. EINHORN. One refers to items specifically on the nuclear missile list. Any item on the list will be denied to any entity.
    The other has to do——
    Mr. BERMAN. Without regard for the purpose for which the sale would have been made?
    Mr. EINHORN. The other refers to other lists, not just nuclear and missile, but other control lists. Items on those control lists will be denied to certain end users in India and Pakistan associated in some fashion with nuclear and missile programs.
    So, in the first case, we are talking only about nuclear missile items, in the second case, a broader universe of items which would be presumed to be denied to certain end users in India and Pakistan associated with the nuclear missile programs.
    Mr. BERMAN. That is where you will have a presumption of denial?
    Mr. EINHORN. Correct.
    Mr. BERMAN. You talk in the beginning of the fact sheet, and you mentioned in the testimony certain goals we now have. Are you saying no more testing, signing of the CTB, refusing to deploy missiles or nuclear weapons, cutting off fissile material—were we to achieve those goals, were we to get those indications, are you saying that under the law that was passed, that the President signed, that you would not be able to then terminate these sanctions?
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    Mr. INDERFURTH. The sanctions will require affirmative action by Congress to lift. That decision will be in your hands. At some point, if we make enough progress on the steps that we have outlined with the CTBT, or reductions in tensions or movement toward addressing the root causes of the dispute between the countries, all of these things would be taken into account. And at some point, if these steps were taken, we would want to make a recommendation to Congress on how we think we should proceed, but it will be an affirmative action by Congress on whether or not the Glenn amendment sanctions will be lifted. It will be in your hands.
    Mr. BEREUTER. Thank you.
    The gentleman from Illinois, Mr. Manzullo, is recognized.
    Mr. MANZULLO. Thank you very much.
    Mr. Aaron, are there any provisions in U.S. law that prevent import sanctions on India and Pakistan?
    Mr. AARON. Not that I am aware of, sir.
    Mr. MANZULLO. GATT doesn't prevent that?
    Mr. AARON. No, they have a national security exemption, and that would have to be the basis for any action taken.
    Mr. MANZULLO. What amazes me is, with regard to India, we cut off about $3.5 billion worth of Ex-Im Bank guarantees, which could cost about 80,000 American jobs; the Indians took that into consideration before they detonated.
    But sanctions hurt American jobs. What are we doing here?
    Mr. AARON. Mr. Manzullo, the purpose of the sanctions was, first of all, to fulfill the obligations of our law created by the Glenn amendment, and of course the Glenn amendment does not call for imposition of import sanctions.
    Moreover, our concern is with the Indian and Pakistani Governments and particularly their proliferation programs. It is not with the private sector in India or Pakistan or——
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    Mr. MANZULLO. I understand. But the definition of the word ''sanction'' is ''to penalize,'' ''to hurt.'' Hurting American jobs because of what India did doesn't make sense. If you want to sanction India, and obviously we don't agree with what India or Pakistan did, but why hasn't the President moved to have some restriction on their imports to our country?
    Mr. AARON. I guess I would refer you to the debate that took place when the Glenn amendment was first passed, and I think that that debate was aimed at what measures we could adopt here that would be directed toward deterring the governments of non-nuclear states from taking nuclear decisions.
    I think the conclusion of that debate was that these were the substantial sanctions that ought to be put in place.
    Mr. MANZULLO. That may be the case, but doesn't the President have the authority to impose high tariffs on Indian or Pakistani imports to the United States?
    Mr. AARON. He has authority to do a number of things. I am not too sure if that is exactly the right one. He has authority under both his emergency economic priorities and under——
    Mr. MANZULLO. So the President could tell India and Pakistan that because of their activities of detonating these nuclear devices, their exports are not welcome to this country; is that correct?
    Mr. AARON. As I understand it, he has authority under the WTO and emergency economic powers to impose import constraints for national security reasons. But the purpose of these sanctions was to fulfill the law that was passed by the Congress.
    Mr. MANZULLO. You know, subject to the law and the letter of the law, I thought the purpose of the sanctions was to send a message to these countries they shouldn't do this. Is that correct?
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    Mr. AARON. The purpose of the legislation, as I think the Assistant Secretary pointed out, was to deter——
    Mr. MANZULLO. How does it deter India and Pakistan from detonating if the punishment they get is that we lay off American workers?
    Mr. AARON. Sir, I would say that there will be some deterrent effect on them because——
    Mr. MANZULLO. How?
    Mr. AARON. Let me just indicate to you that there has been a cutoff of a billion dollars' worth of assistance from the World Bank.
    Mr. MANZULLO. Yes, assistance to buy American goods. That is multilateral with the World Bank.
    Mr. AARON. Not all of that money would have come to the United States; indeed, maybe none of it would have come to the United States.
    Mr. MANZULLO. I understand. But India said they took into consideration the sanctions the United States would impose before they detonated. I am at a complete loss, and I agree with the President that India and Pakistan shouldn't have detonated; but when we talk about sanctions, we should be saying, if you detonate, your products are no longer welcome in this country. The President has the authority to do that, and the correspondence I receive from my constituents is, if the purpose of sanctions is to punish—if you have got a 16-year-old and he comes home past midnight, the sanction is, you ground him. You take away his privileges. You do something to hurt him so he doesn't do it again.
    Mr. AARON. May I suggest those are two different questions. One question is what we are obligated to do under the law, and what we are obligated to do under the law is to take the steps the President has taken.
    Your point is, should we go further than that and also impose import sanctions as a further deterrent to India and Pakistan; and as to whether that would be effective and constructive, I would be happy to turn to my State Department colleague to give you a response on that.
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    Mr. MANZULLO. That could have been said 4 minutes ago.
    Mr. AARON. Sorry?
    Mr. MANZULLO. Does anybody have the answer to my very simple question? Mr. Einhorn?
    Mr. EINHORN. Let me say, we implement the law the way it is written. The Glenn amendment has many provisions. Our first priority must be to carry out the letter and the spirit of the law.
    Mr. MANZULLO. But the first part is to do something that makes sense, Mr. Einhorn, if the——
    Mr. EINHORN. Congressman, if you want us to do something that makes sense, then revise the laws, the sanctions laws. Give us the flexibility and put in criteria such as we should implement this law in such a way so that it is directed at the target of the sanctions, not at American workers.
    Mr. MANZULLO. I understand that. But has the President proposed that, and doesn't he have the authority such as the national security waiver under WTO to impose those sanctions?
    Mr. EINHORN. Actually, I was in a meeting on the other side of the Hill where Secretary Albright suggested that we set up a working group or committee——
    Mr. MANZULLO. Another commission. That could take another 5 years.
    Mr. EINHORN [continuing]. To work out sensible sanctions that are designed to promote nonproliferation objectives and not hurt American workers.
    Mr. MANZULLO. I would like to join that committee.
    Mr. BEREUTER. The time of the gentleman has expired.
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    We will have a second round. I intend to have two rounds of Members in attendance.
    We can proceed with questions by the gentlelady from California, Mrs. Capps.
    Mrs. CAPPS. It would be difficult to overestimate the importance of the nature of this hearing, as The New York Times said. I appreciate your testimony and I appreciate, Mr. Bereuter, the calling of a hearing on this topic. It is an important matter to discuss.
    I want to pick up on a theme that was part of one of your paragraphs, Mr. Inderfurth. You mentioned that you wanted to underscore the purpose of the sanctions to influence the behavior of both India and Pakistan, not just simply to punish for punishment's sake.
    My thought here is to get further information, if possible. You don't want to isolate the countries—maybe that is the nature of what we have been talking about—rather, to take steps to demonstrate a firm commitment to their abilities to pull together and not proliferate nuclear arms, but rather to follow and improve relations with each other.
    Are there ways that you can enumerate for me, and us—specific ways you are working to achieve these ends both in the area of trade, but also in the Department of State?
    Mr. INDERFURTH. Congresswoman, I would like to make a quick reference to something you said about not proliferating.
    It is important for everyone to understand that in terms of the record of both India and Pakistan, although we are very concerned about their own programs, they have not been proliferators of either one of their nuclear or missile technologies abroad.
    This is a terribly important point, because we want to make certain that even though they have these capabilities that they do not export, transfer, sell the technologies or the expertise. And they have pledged to continue that practice, and we think that is one of the most significant actions they could take, to formalize those pledges for the international community, and that is one of the things we are urging them to do.
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    The efforts that we are making—and I mentioned earlier in my testimony that Deputy Secretary Talbott met with a high-level Indian official, Mr. Jaswant Singh, to reopen the channels of communication to see where we might go. We want to do that with Pakistan as well. We want them especially to talk with each other.
    It was about a year ago in July that Prime Minister Gujral, the previous Indian Prime Minister, and Prime Minister Sharif met at the SAARC summit, in the Male meeting, and shook hands and said they wanted to put the past 50 years of tensions behind them. We were encouraged, hopeful. And they set up a mechanism of direct talks at the Foreign Secretary level, and in those talks they agreed to cover eight specific areas including peace and security, which covers nuclear missile issues and Kashmir, an issue which has been with these two countries since they were established 50 years ago and has caused two wars.
    So we want to see them re-engage, and we will be as helpful as we can be with others in the international community—not as mediators, but to see them move forward; there are things we can do in terms of providing technical assistance or advice—as well as with other members of the international community.
    So we have, quite frankly, lots of ideas. There are a number of organizations in the Washington area, including the Stimson Center, that has books on the shelf of things that antagonists can do to address or reduce tensions. That is what we are trying to do at this stage, as well as implementing the law that is called for in terms of sanctions.
    Mrs. CAPPS. I guess then, to further that line of thinking, the detonations were themselves a step backwards and created a crisis. The sanctions, can they be used in a positive way in any sense of the word?
    Mr. INDERFURTH. Well, they can be used in a positive fashion in terms of steps that they could take which would allow us to move away from the sanctions themselves. In that sense, they could be seen as incentives. But I will tell you that from my experience, brief as it is as the Assistant Secretary for this region, sanctions by themselves don't move these countries very far.
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    Pakistan has had Pressler amendment sanctions in place since 1990, and it was very clear to Pakistan that their nuclear weapons program was far more important than the F–16 aircraft which were embargoed as a result of the imposition of Pressler. The threshold for pain is high; they will take the heat.
    So what we have to do—this is what I was pointing out at the conclusion of my testimony—we have to find a way of coming at this that takes their national security views into account. We may or may not agree with them, but we have to take those into account; and for India, that means not just paying attention to Pakistan, but also to China. We have to have that; we have to see these things in part through their eyes before we can figure a way to move forward.
    Mrs. CAPPS. So sanctions by themselves are not sufficient.
    Mr. INDERFURTH. Exactly.
    Mrs. CAPPS. Thank you.
    Thank you, Mr. Chairman.
    Mr. BEREUTER. Thank you, Mrs. Capps.
    We have one vote, we think. A Member has gone early to be ready to come back and reconvene, so I will say, we will be in recess until 3:05. Mr. Rohrabacher will be up here if he is available at that time.
    The Subcommittee will be in recess.
    [Recess].
    Mr. MANZULLO. [Presiding.] Mr. Rohrabacher is on his way back from the floor. We just had a vote to form a committee to study China in the House of Representatives.
    I would like to know whether the Administration does have any intentions to multilateralize the sanctions. I understand the recent Geneva meeting of the P–5 members of the Security Council did not result in any multilateral sanctions. Did this group agree to anything beyond a statement of condemnation? Does anybody want to handle that one?
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    Mr. INDERFURTH. Mr. Chairman, I will start and will ask Mr. Einhorn to add. He led our delegation of experts over to both the P–5 meeting in Geneva as well as the G–8 meeting in London.
    I would make one comment in terms of multilateralizing. We do believe that this is an issue responding to what has taken place in South Asia that requires the fullest attention of the widest possible membership of the international community. We started with the permanent five members of the Security Council, all nuclear weapons states. The G–8 meeting broadened that discussion to include countries that are not members of the P–5, that have important interests at stake; and there was a luncheon given there to include Ukraine, Brazil, Argentina, also the Philippines, China, and South Africa. That included the four countries there that could have been nuclear weapons states, but decided that they would renounce that option. That was an important signal to send.
    We also have seen a vote by the 15 members of the Security Council, and we have seen statements made in various regional groupings. So we are moving beyond the United States' direct condemnation in our sanctions, to try to bring in the wider circles within the international community.
    Mr. MANZULLO. Anybody can talk, but what about economic sanctions from these other countries?
    Mr. INDERFURTH. The economic sanctions that have been imposed on some dozen states, including Canada, Australia, the Nordic countries and Japan. They have imposed unilateral sanctions against India as a result of its testing. Many of the same countries have announced they will impose similar sanctions on Pakistan. It is clear——
    Mr. MANZULLO. Isn't that just foreign aid, not economic sanctions?
    Mr. INDERFURTH. I could provide this information for the Committee. For instance, with Canada and Australia, Ottawa cut all nonhumanitarian assistance, canceled military sales. Canberra severed all defense contracts and suspended other than humanitarian aid. There have been a variety of sanctions. Norway froze bilateral aid and will grant no new export credits. A number of states have taken steps to impose sanctions; clearly a number of states have not.
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    I would call attention to what was probably the most concrete result of the G–8 meeting, which was to agree to a common approach to continue to postpone loans by the international financial institutions for India and Pakistan. That was a common approach agreed to there and has already had a very significant effect of over $1 billion of World Bank loans for infrastructure projects and energy to India being canceled.
    Mr. MANZULLO. Have any of those countries imposed any sanctions on India or Pakistan with regard to those countries' exports?
    Mr. AARON. What we know at the moment, Mr. Chairman, is that loans for new projects could be tied or may be untied, but the yen loans have been frozen. They usually run about a billion dollars a year to India. And similar assistance on the part of some European countries is on hold as well.
    There has been a $30 million canceling of grants from Japan to India.
    Mr. MANZULLO. What type of grants? Foreign aid?
    Mr. AARON. These are probably basically development grants which could partly emerge as exports, but might emerge as——
    Mr. MANZULLO. What about Japan's Ex-Im Bank?
    Mr. AARON. I don't know whether the yen loans cover their Ex-Im Bank or not.
    Mr. MANZULLO. As we sit here now, none of the countries has really done anything to curb the exports of India or Pakistan to the countries that are protesting the detonations, at least directly.
    Mr. AARON. I think it is fair to say, clearly some countries have not; for example, the Germans announced they would not do that. And as I indicated in my testimony, the steps that have been taken by other countries are nowhere near as comprehensive as the ones that we are required to apply by law.
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    Mr. MANZULLO. Does the Administration plan to approach more countries than those to which you just referred?
    Mr. INDERFURTH. The effort by the U.S. Government at this stage is to build on what we believe is momentum from the P–5 meeting and the G–8 meeting. We do intend to move forward to bring other countries into this. We have had two ministerials. The Secretary of State for 2 weeks running has traveled back to Europe for these meetings.
    We do see other regional meetings that will be taking place, including ASEAN in July, where we can continue to make the case that this issue must be addressed by the broader international community.
    Right now, however, we do believe that it is important to try to bring the message that has been adopted and the framework that has been adopted by the P–5 and G–8 directly to the two countries involved, and that is what we are doing through our bilateral contacts. We believe that is a channel that it is time to explore as fully as we can.
    Mr. MANZULLO. Congressman Pallone.
    Mr. PALLONE. Thank you, Mr. Chairman. I apologize that I missed your testimony at the beginning although I have been trying to read it while listening to the questions and answers.
    I want to ask three things and I don't know if I can get them all in in 5 minutes, but I will try.
    First of all, with regard to the sanctions, I know, Mr. Inderfurth, in your testimony you mentioned how there is little flexibility to modify their application, and the general impression I get is that these sanctions are very strong and in many ways box us in and require that certain things be done without a great deal of flexibility.
    Then you went on to mention that the type of actions that India or Pakistan could take that might be looked upon favorably were such things as signing CTBT without conditions, halting production of fissile material, you listed a number of things.
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    In conversations I have had, there were suggestions by myself and Senator Glenn and others in the Senate about introducing legislation at some point in the near future that would either give the President more flexibility in terms of the ability to waive sanctions; or I think Senator Glenn has talked about expedited procedures to remove the sanctions in the event that the Administration recommended that.
    I had talked about legislation that would perhaps try to achieve removal of sanctions as sort of a carrot-and-stick approach in step-by-step fashion. For example, if India were to halt production of fissile material, perhaps one aspect of the sanctions would be removed.
    All these things, I think are being suggested because of the feeling there is a lack of flexibility in the legislation now with regard to the implementation or lifting of the sanctions.
    I just wanted to know whether you have looked at any of those things, and whether you have thought about or would be in favor of any of those options in terms of legislation because of the lack of flexibility right now.
    Mr. INDERFURTH. Congressman, we are very much aware of the discussions taking place on the Hill by you and Senator Glenn and others and Members of this Committee about looking at sanctions and the question about whether or not additional flexibility should be built into these sanctions regimes for the President.
    We believe that there should be additional flexibility. That is not surprising, I am sure. We believe there should be expedited procedures that could allow the President to take certain actions as he sees the sanctions, what is called for, being produced.
    I would be somewhat concerned myself—and I would like to ask Mr. Einhorn, because he is dealing with these on a whole range of issues. I would be somewhat concerned if legislatively we got so specific about a step-by-step approach. In other words, you mentioned fissile material. Well, that would be a very important step. You cut off production of fissile material and you have basically choked off the ability of a country to increase its weapons grade material, and that would be a very significant step.
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    If you had a commitment of no further fissile material production with appropriate verification procedures and moving toward a negotiated treaty on that subject in Geneva, this would be very important, but I would hate to see that become the standard by which something would happen and then, if they do, the next step would need to be carefully calibrated. So without getting into the specifics of the step-by-step, a recognition of expedited procedures, a recognition of greater flexibility is certainly something the State Department supports and the Secretary has spoken to.
    Mr. EINHORN. Just to follow that, Congressman, the idea of step-by-step is a sensible one. If these two states take actions toward the objectives we have specified, we should have the flexibility to respond in a positive way. But again there are risks in overdesigning this process.
    It is like the question Congressman Manzullo raised earlier about imports. Would you want to specify in a sanctions law that in all cases you should limit or cut off imports? We may not be importing from that entity or from that country, for example.
    So to have the flexibility to design a step-by-step approach or to tailor the penalties to the particular case at hand would be worthwhile to have.
    Mr. PALLONE. I appreciate that. Can I ask you my second question with regard to Kashmir. I know that, prior to the testing—going back to Mr. Inderfurth—that you and I think the State Department generally was very careful not to suggest that the United States or the United Nations would necessarily get involved in the Kashmir issue, that it was pretty much understood, and I think articulated by you and others in the State Department, that this was something that would be negotiated bilaterally. And, of course, there were negotiations going on at the time, in general, not over Kashmir, but between India and Pakistan. Now I see sort of the opposite happening, suggestions that this be brought up in the United Nations and that the United States bring up the issue of Kashmir sort of as a third-party mediation.
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    I personally think that that is not wise. I think the old policy made sense in that it is not likely the two countries would get to the point where they discuss Kashmir in a serious way unless they are doing it directly between each other, without U.S. or U.N. or third-party interference.
    I am just wondering, has there been a change in U.S. position and why? It is not likely to result in a positive development, in my opinion.
    Mr. BEREUTER. You can attempt to develop that in your answers.
    We will have to come back for your third one.
    Mr. INDERFURTH. Congressman, we are not trying to interfere or mediate that dispute. There has been no change in that sense in U.S. policy.
    What did occur on the 11th has been an event that has called attention of the international community to how volatile the situation in South Asia can be and how dangerous it can be. But it was not just the nuclear tests that raised concerns of the international community. It was also statements by Indian officials, including Mr. Advani, the Home Minister who talked about Kashmir and talked about hot pursuit across the Line of Control, those things which could cause the Kashmir issue to be the flash point for another conflict on the subcontinent. There have been unwise and provocative statements by Pakistani officials as well.
    Kashmir is an issue that we and the P–5 and the G–8 have all said should be dealt with directly between the parties. But we have been very explicit in calling attention to Kashmir. Indeed, the U.N. Security Council resolution, passed 2 weeks ago, mentioned Kashmir by name for the first time since 1965, and there is no question that it has not been our desire to step in; but what has happened in the last 6 weeks has raised the profile of that issue and it cannot be ignored. We are urging the parties themselves to address it.
    We think there are things that the international community can do to support that dialog and indeed provide assistance; if they reach, for example, certain understandings, we may be able to help with confidence-building measures including technical or monitoring assistance. But this issue is 50 years in the making. It goes back to 1947, back to the book Secretary Albright's father wrote, ''Danger in Kashmir''; and it is still very dangerous in Kashmir, and we need to encourage the parties to address it.
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    Mr. BEREUTER. Thank you, Mr. Secretary.
    The gentleman from California, Mr. Rohrabacher, is recognized under the 5-minute rule.
    Mr. ROHRABACHER. Thank you.
    Mr. Secretary, I think that your Administration's actions belie your words when you say Kashmir can't be ignored. Obviously that is what this Administration has been doing, and that is one of the reasons we are on the edge of a catastrophe now on the subcontinent.
    You left the one issue we know is the key to calming down tensions between these two powers, we have left it to fate. We have left it to them. We have withdrawn and said, you guys handle it; we are not even going to be a mediator, from what you said earlier.
    Let us be very clear what we are talking about today. We are talking about a significant failure on the part of this Administration. I know you are new to the Administration, but you are not that new anymore. You are going to have to start bearing some of the responsibility for these failures. This is a failure, and, if for some reason there is a nuclear exchange between India and Pakistan, it will be a catastrophic failure, historically catastrophic failure.
    You know, I think back about what can we do and why we have not been able to have the influence. First, we have not tried in the area of Kashmir, but, second, just before the break, you mentioned something about, well, they were just set on having their detonation and their nuclear explosion, talking about the Pakistanis. Their F–16s didn't even count.
    How many times have we lied to the Pakistanis about the F–16, this President telling the prior Prime Minister, telling her she was going to get the money back or get her F–16s? No wonder these people don't listen to us. We treat them in a fashion that does not lend themselves to trusting our commitment, our word. You know we are not going to have much impact down there.
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    Now we have somebody beeping me, pardon me.
    So let's just get to this. Is it against the law—or put it this way: The laws requiring us to do things now that they have detonated these weapons, was it just as much against the law for someone to give them these weapons, nuclear technology, for example, in Pakistan? Was that just as much against the law, whoever provided that technology? Aren't there sanctions against someone who is proliferating nuclear technology, as well as the recipient? Doesn't that law say something about that as well?
    Mr. INDERFURTH. Can I respond to the first part of your statement?
    Mr. ROHRABACHER. Let's go to this one——
    Mr. INDERFURTH. I will let Mr. Einhorn, who knows the law better than I, respond also, but I would like to——
    Mr. BEREUTER. We will give the Secretary time to respond to both.
    Mr. EINHORN. Yes, there are various laws. The Symington amendment is one. There are others that go to the question of importing and exporting certain kinds of nuclear-related technologies.
    Mr. ROHRABACHER. So if someone is exporting the nuclear technology, that is something that would require action on our part against that country, as well as, you are saying, the law now requires us to act against Pakistan and India because they have decided to use that technology. Correct?
    Mr. EINHORN. Sure. I mean——
    Mr. ROHRABACHER. So here we are deciding we are going to implement the law against Pakistan and India, but with the Chinese who we know damn well are the source of the technology, we have the President of the United States going for a visit, trying to expand trade.
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    Now, look, the Indians are sitting there watching us helping the Chinese with their missile technology, and they say, oh, my gosh, we had better be sure we are capable of nuclear tachnology, so people know we are not falling behind; we had better explode this big bomb, so they know we are a force to be reckoned with, because we can't trust the United States.
    And Pakistan gets into the cycle of violence—you know, don't you understand why they don't trust us?
    Mr. EINHORN. Congressman, let me respond to that.
    First of all, I think one has to recognize that these were two governments that acted on their own. I think they deserve the blame for taking some of the stake in decisions rather than blaming the United States for this action.
    Mr. ROHRABACHER. I am not blaming the United States. I am just telling you we are hypocritical about it and that hypocrisy does not miss their attention. Here we run off to China——
    Mr. EINHORN. They are two sovereign governments that say it was in their interest. We think this was wrong, but we don't point the finger at ourselves for their actions.
    Mr. ROHRABACHER. Perhaps if our word meant something better and if we had been an active mediator, rather than saying we are not getting involved in this issue, perhaps we could be a force that would change the history of humankind in one way or another in this part of the world for the better.
    But as it turns out, if there is a nuclear exchange down there, brother, none of us can sit back and say, we did everything we could, because we didn't.
    Mr. EINHORN. We think that our policies over the years have restrained this competition. It has gone ahead in a kind of arms crawl rather than an arms race in large part because of the efforts we have made. Now, it is unfortunate that they have taken the decisions that they have taken, and now our job is to do whatever we can to moderate this competition and keep it from spilling over to the rest of South Asia.
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    Mr. ROHRABACHER. Before I run out of time—and Mr. Inderfurth has to have time to refute my statement, and I appreciate that exchange—I just signed onto a bill by Mr. Moran that suggests that the President appoint someone representing us to go to the subcontinent, someone of international stature, Jimmy Carter or someone like that, to go and work with these two parties, to do what they can to find an end to the Kashmir problem which then can be used to calm the tensions.
    Is there any support in the Administration for something like that?
    Mr. INDERFURTH. Congressman, we would be more than pleased to undertake that type of activity and, indeed, we have been encouraging it. But a mediation requires both parties to agree to the mediation. Do you force one party that refuses to accept outside involvement? That is the case there. So how——
    Mr. ROHRABACHER. I guess mediation is different than arbitration.
    Mr. INDERFURTH. Maybe it is appropriate to mention Dayton with Mr. Holbrooke's appointment, or his nomination today.
    In Dayton we had two sides that engaged in a terrible conflict, but who were willing to come together, and they did it; and some progress, and important progress, was made and an agreement reached.
    We do not have two parties that are willing to sit down with a third-party mediator. Pakistan says yes, India says no.
    So we have been encouraging to develop a similar agreement to sit with them, and we have been offering any assistance the parties would like to have. President Clinton was the first President to meet with these Prime Ministers last September at the United Nations. He met three foreign leaders at the U.N. General Assembly last September, two of whom were from South Asia, Gujral and Sharif. The other was the Russian Foreign Minister. We have put a lot of time into this, encouraging them quietly and privately to move forward. So this has not been off our radar screen at all.
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    I would say on the F–16 issue, the Pressler amendment brought this into being in terms of the delivery of those aircraft, and they sat there in the desert for all that period of time since 1990. And we fully agree that the inability of the United States to either deliver the aircraft or return the money was unfair, and a raw deal. The President has said that; and he said that he would work on it, and he has. There was no lying there at all. We have been working with Members of this Committee to see if we could get some fair way to address that, including through debt reduction. We were moving ahead with that and Pakistan was about to send over a high-level team to discuss that, and then the bombs went off.
    So we have been working very hard on the F–16 issue for precisely the reasons that you said, something should be done about it. So I don't believe that there has been any lying on our part. We have been trying in a very strong fashion to get this issue resolved.
    Mr. BEREUTER. The time of the gentleman has expired.
    Mr. Secretary, do you wish to respond to an earlier point or points made by the gentleman from California?
    Mr. INDERFURTH. I just did.
    Mr. BEREUTER. All right, you seemed to answer both at once. We will have another round of questions if the Members wish to stay.
    I recognize Mr. Fox, the gentleman from Pennsylvania.
    Mr. FOX. Thank you.
    Mr. BEREUTER. Thanks for coming back.
    Mr. FOX. I would ask follow-on questions of the panel.
    What are the attitudes of our friends and allies regarding the current situation in Pakistan and India? How far are they prepared to go in seeking a resolution?
    Mr. INDERFURTH. Congressman, we have, as I mentioned earlier, and you have the copies of the communiques that were agreed to in Geneva and London, and we can provide a copy of the U.N. Security Council resolution that endorsed this approach. We think that there is a broad international consensus that steps must be taken to bring India and Pakistan into line with global nonproliferation norms as a part of the international community.
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    We think there are going to be numerous opportunities to pursue this. We do have again the support of those important groups and this is something that is going to be a key element over the next several months as we pursue both our bilateral contacts with them as well as in these multilateral forums.
    Mr. FOX. With both of these countries, their needs for humanitarian aid or health care or food seem to far outreach any need for being involved in a nuclear arms buildup. Has that been part of the discussion by our official representatives with those countries?
    Mr. INDERFURTH. It has been, Congressman, and the Glenn amendment sanctions do provide an exception for humanitarian assistance, so we will continue with our bilateral humanitarian programs. And with respect to the international community, the agreement in London of the G–8 to postpone further loans for the two countries in the IFIs did have a basic human needs exception there. So there is a very real understanding on the part of all the countries that we have been dealing with about the enormous economic problems in both countries and that indeed they are pursuing very expensive military and nuclear programs and diverting resources away from the needs of their people.
    So this is something we very much are taking into account, and indeed it has been one of the most regrettable aspects of this that things we wanted to do to assist in moving forward and meeting these needs will now be affected.
    Mr. FOX. Has the Administration prepared an official list of positive actions they would like to receive from Pakistan and India before requesting Congress to lift the sanctions required by the Glenn amendment?
    Mr. INDERFURTH. Congressman, we have and those were outlined in my statement, and they go to addressing the immediate concerns of no further nuclear testing; and they both have announced unilateral moritoria for that—to not weaponize or deploy their nuclear weapons, to taking steps to join the international Nonproliferation Treaty countries, engage in CTB-FMCT negotiations, and resuming high-level talks.
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    We hope in July in Colombo the two Prime Ministers will meet and resume that dialog that regrettably, even though Congressman Pallone referred to as negotiations, I respectfully say they never reached the point of negotiations. They were still in the procedural wrangling stage of what is a working group and do the foreign secretaries deal with this or that topic.
    We would love to see them reach a situation where they have serious talks.
    Mr. FOX. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Mr. BEREUTER. Thank you, Mr. Fox.
    I will begin a new round of questions, but we will cut it to 3 minutes to make sure we don't proceed longer than we should here and impose on your time any more than we need to.
    I would like to note that both you, Mr. Secretary, and Deputy Assistant Secretary Einhorn visited India just weeks before the nuclear tests. Do you believe Indian officials accurately represented India's nuclear policy in the days prior to testing the device? Were they deceptive, disingenuous or less than forthright?
    To what extent has Pakistan been forthcoming about the nature of its nuclear weapons programs and the sources of its nuclear technology? Or however you would want to describe that.
    Mr. INDERFURTH. Mr. Chairman, prior to the testing by India on May 11th, I was part of a delegation headed by Ambassador Richardson, joined by Mr. Riedel of the National Security Council staff, myself, Mr. Einhorn, we went to New Delhi as well as Islamabad. This trip had been scheduled earlier, but we waited until after the Indian elections because we wanted to meet with the new Indian Government. We met with the new Prime Minister, with the Defense Minister, Home Minister, Foreign Secretary—a range of high-level officials. We expressed our desire to resume the policy of engagement that we had begun before the Indian elections, and Secretary Albright had been a part of in her visit in November and that we were looking forward to the President's visit later in the year.
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    So we started on that basis, and we also urged a continuing restraint by the Indian Government concerning nuclear and missile activities. We were there just days after the Pakistani Government had tested the Ghauri missile, and we were quite concerned and indeed relieved that the Indian officials that we spoke with said that they were not going to respond to this on a tit-for-tat basis, that they had a strategic defense review under way, and that they were going to conduct that review and then make appropriate decisions.
    So we were encouraged by their statements of restraint. It was with a certain amount of surprise and disappointment on May 11th when these tests took place, because we had no forewarning. Yes, we believed that Indian officials could have been more forthcoming with us about their intentions; and clearly, while we were there, decisions must have already been made because you don't conduct an underground nuclear test overnight.
    So we were disappointed. We have made that disappointment clear to the Indian Government. But we do not intend to conduct policy by pique. We are going beyond that, and we want to have a discussion with them on where we go from here.
    The Pakistani Government was very forthright in what they said to us about the difficulty of the decision they were facing, and we went there right after the Indian tests with Deputy Secretary Talbott and General Zinni.
    We had good discussions with the Prime Minister and others. The President was on the phone four times with the Prime Minister. So we did feel they heard what we had to say and they shared with us what they were thinking about this. Regrettably, they decided to follow suit. But at least in this instance we felt we had a more candid and open channel of communication with the Pakistani Government about this issue.
    Mr. Einhorn can discuss the other element of your question that you asked.
    Mr. EINHORN. Well, we have had a long-standing discussion with the Pakistani Government, over decades now, and the Pakistanis have provided various assurances to us over the years. They have often been at pains to tell us that the restraint they said they were observing was not a matter of a commitment to us, but was a voluntary restraint, a matter of national policy that they believed was subject to change if the circumstances should require a change.
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    So this has been a long series of discussions, and we have often been disappointed with some of the directions that the Pakistani Government has taken. But on the other hand, they have been very clear with us throughout that, for them, the highest priority was to ensure that their national security requirements would be met; and we think that that has been the principal motivation by the Government of Pakistan, and they have been very clear with us that they would do whatever they needed to do to ensure their vital security interests.
    Mr. BEREUTER. Thank you.
    The gentleman from California is recognized under the 3-minute rule.
    Mr. BERMAN. Thank you, Mr. Chairman. I would like to take your goals and as quickly as possible, in 3 minutes, see where we stand with both countries.
    Halt further testing: What is the latest India and Pakistan have said on that?
    Mr. EINHORN. India said it is observing a voluntary moratorium on nuclear tests. It has said that it is prepared to consider a de jure legal commitment to embody that restraint.
    Mr. BERMAN. Is that the CTBT?
    Mr. EINHORN. We want it to be, and we will continue to urge the Indians to sign the CTBT without conditions. Some Indian officials have suggested that they would like to see some modifications of the CTBT. We and others, there are 149 countries that have signed the CTBT, and they would want India to simply sign without any changes.
    Mr. BERMAN. Pakistan?
    Mr. EINHORN. Pakistan also has announced as of, I believe, last Friday that it is joining India in observing a moratorium on further testing; and I believe it would be prepared to explore some way of formalizing restraint, whether on a regional basis or as part of a global basis, that is to say, a comprehensive test ban.
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    We place a high priority in persuading both governments to join the CTBT without changes.
    Mr. BERMAN. It is our desire to get both countries to sign the CTBT, but to not undermine our ability to help bring those parties into a framework for a sort of bilateral moratorium of some kind—not moratorium—bilateral agreement to cease testing.
    Mr. EINHORN. The best approach is to meet the international testing protocol, the CTBT. That is our goal to persuade them it is in their interest to do that. In the interim, if they wish to work out some bilateral arrangement, we obviously have no objection to that. But the important thing is for them to meet the international standard as soon as they can.
    Mr. BERMAN. What about deploying missiles or nuclear weapons? What is the state of the missile deployment? India has had several different missile programs. What do you mean by ''deployment''? Do you mean deploy by the border, anywhere where it has a range to hit the other country?
    Mr. EINHORN. The Indians have short-range missiles, the Prithvi. They have a longer-range, the Agni-plus program. That latter program is still in a testing/developmental stage; it is not near the deployment stage. As far as the Prithvis are concerned, they have conducted a number of tests, actually 16 flight tests, and a number of Prithvis are in storage not far from the Pakistani border.
    It is our judgment that none of these missiles are operationally deployed today, and we would very much hope that they would stop short of that threshold.
    Mr. BERMAN. How about Pakistan's deployment of missiles?
    Mr. EINHORN. The same thing. We do not believe that Pakistani missiles are operationally deployed.
    Mr. BERMAN. What do you view each country's capability to be to put nuclear warheads on the missiles they have?
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    Mr. EINHORN. The various missiles they own, whether it is the Prithvi, the Agni-plus, or Pakistani missiles such has the Ghauri medium-range missile that was flight tested, all of these could be judged to be nuclear capable; that is to say, any of them could actually house a nuclear device.
    Mr. BERMAN. I think my time is up.
    Mr. BEREUTER. Mr. Berman, I congratulate you on those important and good questions you got in in such a short period of time.
    The gentlelady from California, Mrs. Capps, is recognized.
    Mrs. CAPPS. In this deployment of missiles and testing that has been going on with each of the countries, India and Pakistan, it obviously has to do with their relationship with each other. You mentioned one major goal. Are there any signs or are you making any direct attempts to expedite conversation between the two countries, or are they resolving differences in any way during this time?
    Mr. INDERFURTH. Well, we are certainly making it clear, both privately and publicly, that we believe that to be the step they should take. Last Friday, Secretary Albright in London referred to something of an emotional roller coaster because during the meeting of the G–8 there was a report from the wire services saying that Pakistan had agreed to an Indian invitation to resume direct talks.
    That was quickly announced to the G–8 members, and there was some sense of movement; and the next wire copy came in and said, no, that Pakistan said this was not the case, that they could not agree to talking under the terms of the Indian proposal, and what is more, we have a different date and different place we would like to meet.
    So we went back and forth on that. At the end of the day, there were no talks scheduled.
    It may be that we will have to wait until the Prime Ministers' meeting in Colombo. We hope they will firm up their intention to meet when they are there. We are encouraging them to do that certainly, and perhaps have preliminary talks at the Foreign Secretary level before then.
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    But this is one constant of all that has been said since May 11, talk about it together. There is no way, despite Congressman Rohrabacher's desire to see us step into the Kashmir dispute, if we have only one side willing, to have other parties involved. It makes it very difficult to be a mediator.
    Mrs. CAPPS. Thank you.
    Mr. BEREUTER. Thank you, Mrs. Capps.
    Mr. Pallone, I think you have one question of the three you didn't get to ask, and we will go to you for the final question.
    Mr. PALLONE. Thank you, Mr. Chairman.
    When the nuclear tests occurred, India articulated the fact that a major reason for them was the threat from China, and of course we know that a big part or significant part of the Pakistan nuclear development—or at least I think so, and a lot of evidence of that is available—was as a result of transfer of technology, there was significant transfer of technology to Pakistan.
    That is why I was surprised last week when the President said—I think he stated that China has to play an important role in resolving tensions between India and Pakistan, and China should forge a common strategy for moving them back from the nuclear arms race.
    I suppose this was in anticipation of his trip to China. To me, it made no sense because I would think just the opposite, that bringing China into this and trying to have China play some sort of mediation role would be the exact opposite of what certainly India would want; and rather than do that, the bilateral relationship between the United States and India could play more of a role.
    You mentioned that yourself. After all, we are a democracy like India. We have a lot of economic interests in India. Why would we want to bring China in to play some mediation role in all this?
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    Was that just, you know, a misstep or, seriously, are we pursuing that, because I would think it counterproductive to get China involved in some sort of mediation between India and Pakistan. We should pursue that on our own, because we have more common interests with the countries.
    Mr. INDERFURTH. Congressman, I don't think that it is envisioned that China will be a mediator. In fact, I doubt if the Chinese would envision their being mediators between India and Pakistan.
    The point the President was making, I think, and we all firmly agree with, is that these are the two giants of Asia. Indeed, shortly after the next century begins, India will almost certainly surpass China as the world's most populous nation. They have enormous economic potential. Their weight will be felt around the world, whether it be on military matters or with respect to environmental matters. Climate change cannot be solved unless you get those two countries engaged.
    They must themselves address their differences. Clearly, as we heard with the Indian Defense Minister's statements about China, a lot of Indians view China as their principal threat or their principal adversary; and they are very concerned about Chinese actions and the nuclear program in China and the rest. We are very much encouraging them to speak together. And indeed when President Jiang Zemin went to India in 1996, we saw an encouraging sign that they were breaking down the walls of suspicion.
    So we see China playing an important role in terms of regional stability, they should be dealing directly with India and vice versa; and without a Chinese involvement, we believe that the overall Asian security issue cannot be addressed. So that is the role we envision.
    Mr. EINHORN. China, we regard as an important player. They can do a number of things to help promote stability in South Asia. You alluded, I think, Congressman, to certain assistance China provided to Pakistan in the past. There is no question that in the past China did provide support for Pakistan's unsafeguarded nuclear program. This became a big problem between the United States and China. It was an important subject of our discussions over recent years.
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    We believe that China has taken very important steps to correct that behavior, and in the last few years, we don't have any evidence that China has provided material or equipment to Pakistan's unsafeguarded program. So we see a marked improvement in the nuclear area, although we still continue to have some questions about its cooperation in the missile area.
    But China can play a big role in ensuring its cooperation is consistent with international norms. It also can play a very important role in its relations with India as Assistant Secretary Inderfurth pointed out.
    The concern about China has been one of the motivating factors for India. We think some of the things that have been said about the China threat by Indians have been exaggerated, but nonetheless we recognize that India has questions about its neighbor to the north.
    It is very important that China sit down with India and talk about those difficulties, try to resolve their border problems. If they were able to establish confidence-building measures and other bases for cooperation, this would do much to alleviate Indian concerns and facilitate cooperation within the subcontinent.
    Mr. PALLONE. Thank you, Mr. Chairman.
    Mr. BEREUTER. Thank you very much.
    In winding up our hearing today, I would say to Mr. Inderfurth that I do have five related questions on Indo-Chinese tests, particularly as they relate to India's nuclear development program, that I would appreciate if you could look at and respond to, if you can; and they will be made a part of the record for the full Subcommittee.
    [The information referred to appears in the appendix. However, answers to questions 1 to 3 and 5 are classified. The documents are available in the Full Committee office to those with appropriate clearances.]
    Mr. BEREUTER. Also, Mr. Ackerman of New York and Mr. Brown of Ohio have statements they would like to be made a part of the record. I would ask unanimous consent to do that.
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    Hearing no objection, that will be the order.
    [The prepared statements of Mr. Ackerman and Mr. Brown appear in the appendix.]
    Mr. BEREUTER. Mr. Manzullo——
    Mr. Ambassador.
    Mr. AARON. Before you wind up, Mr. Chairman, I undertook to find out the answer to your question earlier today. It is, in fact, contained in the fact sheet which was distributed to you. It was the determination of the Administration that the CCC credits, which you referred to as GSM, do fall under the prohibitions of the Glenn amendment, but that the President will support legislation to lift those, that particular aspect as it would apply.
    Mr. BEREUTER. Thank you very much. That was expected to be a part of the appropriation bill that is moving forward.
    Mr. Manzullo asked me to raise the question of whether or not the President has the authority to deny GSP to India and Pakistan? Can either of you answer that at this time?
    Mr. AARON. I believe the answer to that is yes.
    Mr. BEREUTER. If you check and find that that is not the case, will you return with that information? Otherwise, we will assume that is a positive response.
    Mr. AARON. I think the answer is yes, but GSP expires at the end of the month. I think we have to have it renewed.
    Mr. BEREUTER. Let me just say that—particularly to Secretary Inderfurth, the sharp questions that were aimed at you by one Member, and we understand the natural response from you since you are discharging your duties for this Administration, I am sure to the best of your ability. We have to admit, as Secretary Einhorn reminded us, that the legislation we had aimed at proliferation issues was effective in delaying the movement, that is clear, of the Indians and the Pakistanis to nuclear testing and nuclear development programs. It ultimately was not sufficient to keep them from acting in their national interests.
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    But I wanted to say to you gentlemen that since we are where we are today, I think it is important that we move ahead and try to see what is in our best interests in working with India and Pakistan; and as Chairman of this Subcommittee and, I would imagine, with full support—and I expect the full support of my Ranking Member—we look forward to working with you to finding solutions to the situation we now face. I hope you have that sense, and if not, I will specifically say that to you at the conclusion of our hearing.
    Mr. INDERFURTH. I think we do have that sense; and we appreciate it very much, and it is our intention as well.
    Mr. BEREUTER. Thank you very much for your testimony, for your time and efforts in behalf of our country.
    The Subcommittee is adjourned.
    [Whereupon, at 4:05 p.m., the Subcommittee was adjourned.]

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