The civilian nuclear cooperation deal between the United States and India, which President George W. Bush signed into law last week, has been controversial from the moment it was first outlined in New Delhi about three years ago. It would allow Washington to trade nuclear technology with New Delhi despite the fact that India is a de facto nuclear weapons state outside of the Nuclear Non-Proliferation Treaty (NPT).

Critics of the deal insist, fairly convincingly, that doing so would cause irreparable harm to the nonproliferation regime, leaving the non-nuclear weapon states that abide by the NPT to question what tangible benefits exist for dutifully assuming their treaty obligations and submitting to NPT restrictions. Conversely, supporters of the deal legitimately point out that the benefits of a good relationship between India and the United States outweigh any potential harm. As with most things, the truth is probably somewhere in the middle--it's unlikely that the nonproliferation regime would remain unscathed, but it's quite possible that the damage could be contained.

A major sticking point for critics is that the deal actually makes it easier for India to continue producing fissile material for its nuclear weapons program by allowing New Delhi access to the world market in nuclear fuel for its power reactors, thereby freeing its scarce uranium resources for the production of weapons-usable plutonium in dedicated reactors that are exempt from any international safeguards. Moreover, India's breeder reactor program--another potential source of weapon-grade plutonium--is also free from safeguards. It's hardly encouraging that India would have the capability to increase its stock of weapon materials, but in reality, this doesn't much matter--probably the main reason why India got away with keeping that capability. There seems to be a worldwide consensus that once New Delhi crossed the nuclear threshold, the amount of weapons in its arsenal is unimportant. In fact, in some important aspects this is exactly the case--beyond its symbolic value India's nuclear arsenal hardly provides any security for the country. Indeed, if the U.S.-India nuclear deal helps strengthen this understanding, it provides some silver lining to the nuclear arrangement's drawbacks.

The deal could also provide a much needed incentive for a critical review of some of the current nonproliferation regime's assumptions. One such assumption is implicit in Article VI of the NPT--nuclear weapon states and their close allies have control over nuclear technologies. This is still largely true for advanced commercially viable technologies, but the monopoly on weapon-relevant technology is firmly in the past. An idea that emerged during discussion of the U.S.-India nuclear deal was to ban the transfer of enrichment and reprocessing technologies to India, supposedly to limit its ability to ramp up production of weapon materials. Limiting production of weapon-grade materials is a reasonable goal, but if the only approach is to deny a country access to advanced centrifuges or reprocessing plants, that battle is already lost.

Similarly, much ink has been spilled over the effort to have India commit to a moratorium on nuclear testing as part of the deal. The intent behind the idea was certainly laudable. But if the threat of cutting off the supply of fuel for nuclear reactors is our best hope to prevent India from nuclear testing, the effort to prevent new nuclear tests is in big trouble.

Without a doubt, the U.S.-India nuclear deal presents a serious challenge to the NPT. But it also presents an opportunity to strengthening the regime and its most important, relevant elements. In particular, for all of its problems and challenges, the NPT has successfully established a norm that assumes that countries shouldn't have nuclear weapons. The official signing of the U.S.-India nuclear deal is a good time to remind New Delhi that if it wants to be a responsible partner in the nuclear trade, it must assume the obligations that come with this norm--even if India never signed the NPT. Of course, this would require the nuclear weapon states to get serious about their NPT obligations and responsibilities as well. And that's not such a bad thing either.

In the waning days of the Clinton administration, the momentum for engagement with North Korea, building from the earlier agreement to freeze its nuclear program and a moratorium on ballistic missile launches, accelerated to the brink of full-scale normalization of relations. The U.S. presidential election in 2000 brought that diplomatic freight train to an abrupt halt.

Will the 2008 election bring yet another dramatic change in U.S. Korea policy?

The answer, based on the published positions of the two candidates and conversations with his senior Asia policy advisors, seems to be NO. There are important differences of emphasis in the approaches of both candidates, which I will discuss, but the bottom line is that both men are likely to pick up where President George W. Bush leaves off.

There are two fundamental reasons why U.S. policy toward Korea – and more broadly in Northeast Asia --- will not change dramatically. First, Asia will continue to suffer from a deficit of presidential attention. The arc of crisis – Iraq, Iran, Afghanistan and Pakistan -- will necessarily still command, as it has for almost 8 years, the attention of senior American policymakers. Even that will have to fight for space with the growing global financial crisis.

Second, both candidates agree on the broad outlines of an Asia policy, one that does not depart radically from the one pursued by the Bush administration. As a senior McCain advisor put it to me: “There is not a huge difference on Asia between Obama and McCain.” Privately, Obama advisors also stress that there will not be a huge break with current U.S. policy.

Both campaigns are critical of the lack of attention paid to Asia and the need for the U.S. to be more proactive to strengthen existing alliances and to join the discussion about new forms of regional integration. Both candidates support the need to engage, rather than confront, a rising China. Both men call for the U.S. to pay more attention to management of our alliances with South Korea and Japan. And both Obama and McCain support the North Korean nuclear negotiations carried out by President Bush in his second term, although privately both campaigns are critical of the deal that has been struck.

If there are differences, they can be found in two areas – support for the Korea US free trade agreement and the willingness to directly engage North Korea and its regime.

Free Trade and the KORUS Free Trade Agreement

If there is one single issue regarding Korea on which Senators Obama and McCain clearly part company, it is the future of the free trade agreement negotiated with the Bush administration. Senator McCain is an unambiguous supporter of the FTA, not only as a trade pact but also as a symbol of the broader partnership between the U.S. and South Korea.

Senator Obama also supports free trade but is critical of this and other agreements, such as NAFTA, for failing to ensure market access and the protection of labor rights and the environment. Privately, Obama’s advisors understand the symbolic value of the FTA to the alliance, but they plan to ask Seoul to reopen talks on market access, particularly for the automobile industry. Their position reflects the importance of trade unions and the role of some key states – Michigan most of all – in the election outcome. Even if Obama loses, the Democrats are likely to strengthen their control of Congress, making approval of the FTA difficult under any circumstances.

Negotiating with Pyongyang: Back to the Future?

Both the McCain and the Obama camps publicly back the Bush administration’s negotiations with Pyongyang, but both are also privately critical, though for different reasons.

The Obama team is heavily populated by former Clinton administration officials who were involved in the negotiation of the 1994 Agreed Framework with North Korea. They see the current deal as an inevitably flawed bargain, the result of the refusal of the administration to seriously engage the North directly until it had crossed the red line of nuclear weapons testing. With little leverage, not least the credible threat of coercion, we are left with containing the plutonium production of the North, and hoping that a grand bargain down the line can yield full denuclearization.

Obama recognizes the need for “close coordination and consultation with our allies South Korea and Japan,” as one of his advisors put it in a published interview, and supports continuing the Six Party Talks. But the emphasis is clearly on direct talks with North Korea, though conducted with a principled toughness that the Bush administration has not exhibited in its final months in office.

That readiness to conduct direct negotiations, up to conclusion of a peace treaty with Pyongyang and full normalization of relations, is where the two candidates part company. The Republican nominee is clearly uncomfortable with direct dealings with Pyongyang – his position resembles the first term of the Bush administration more than the second in that respect. His advisory team combines realists, mainly veterans of the Powell State Department, and neoconservatives, reproducing the divisions that thwarted coherent policy-making in that first Bush term.

In the end, the views of McCain himself may be decisive. He was an opponent of the Agreed Framework, an agreement he characterized as “appeasement.” He maintained this stance into the Bush administration, vocally opposing any direct negotiations with the North Koreans as long as they maintained the right to develop nuclear weapons. He has been critical as well of the main deal struck by President Bush in his second term – “I didn’t believe in the KEDO agreement that President Clinton made and I don’t believe in this one,” he said in January.

McCain, according to an interview with one of his senior Asia advisors, would “seek a return to the core principles of denuclearization known as CVID, or complete, verifiable, irreversible, dismantlement.” The demand for CVID was the watchword of the Bush administration’s earlier stance, in effect a call for Pyongyang to abandon its nuclear option as a first step. But that demand was dropped after Pyongyang called the Bush administration’s bluff by exploding a nuclear device in October, 2006.

McCain also wants to “broaden our policy goals related to North Korea” beyond nuclear issues, to including human rights, economic and political reform, and reduction of the conventional military threat from North Korea, goals also set out at the outset of the Bush administration. McCain has repeatedly referred to the North Korean regime, and its leader, Kim Jong Il, in harsh terms and embraced a policy of “rogue state rollback.”

Realistically, however, McCain offers no credible, practical means to reach these goals. He reserves, as does Obama, the option to use force. But concretely he comes back to the strategy of pressing China to bring North Korea to heel. Unfortunately the Bush administration also relied on China and found there were clear limits to Beijing’s ability to control or its willingness to press its North Korean client. In the end, McCain may have little option but to follow Bush to Pyongyang’s doorstep.

One Caveat – Events Matter

Despite the powerful impetus to maintain continuity in U.S. policy toward the Korean peninsula, no matter whom is elected in November, there is one important caveat to keep in mind – events matter. Unplanned, and unforeseen, developments could force Korea to the top of the President’s agenda. Already we have seen the reports of Kim Jong Il’s serious illness trigger fresh concerns about a possible collapse of political authority in Pyongyang. A simultaneous rush by China, South Korea and the United States to fill a vacuum of power in the North could upset all calculations. For South Korea, and President Lee Myung-bak, it is always best to prepare for the unexpected.

In an article published by UPenn's Center for the Advanced Study of India (CASI), PESD research fellow Dr. Varun Rai reports on the positive impact that India's major energy policy reforms have had since 1998. Rai asserts that these policies are the right platform for India's energy future: they will provide enough transparency and the right economic signals leading to the emergence of an efficient energy system in India. He also draws particular attention to the organizational instability facing the operationally-constrained state-owned firms that are exposed to market competition and to the dangers of decision-making without due consideration of the global dimensions of energy.