Reference: Your Tel. No. 2053 of Dec. 16, 1955, and your memorandum of Dec. 15 concerning the International Atomic Energy Agency and the Control Problem.

INTERNATIONAL ATOMIC ENERGY AGENCY

We have studied with interest the report in your telegram of December 16 on the latest tripartite discussions, and your memorandum on the control problem, which sets out in detail some of the considerations which were in our minds when we drafted the Memorandum to Cabinet? which we discussed with you earlier. In the following paragraphs we shall outline some tentative views which you might try on your British and American colleagues, "on a personal basis", and for the time being only orally. We do not believe it desirable that they should have a "Canadian paper", at least until their own papers are forthcoming, and we should be grateful if you would consult with us before giving them our views in writing.

2. We think it would be desirable if you were to start by stating that although the Canadian Government is fully seized with the importance of developing a system of control to ensure that atomic resources intended for peaceful applications are not clandestinely diverted to the production of weapons, this, in its view, does not diminish the necessity of continuing to seek with vigour a solution to the basic problem of disarmament, working through the Disarmament Commission and its Sub-Committee as appropriate.

3. Our general aim in the forthcoming negotiations is to seek, support and participate in an effective control system, provided that in our judgment it is widely enough accepted and sufficiently effective to have a reasonable prospect of success (cf. paragraph 14 of Memorandum to Cabinet), and, of course, protects legitimate Canadian interests. You could then go on to outline our views on the control problem as follows.

4. Our views are based on certain assumptions, which are set forth in the next paragraph. These assumptions are the best we can make at the present stage and we believe they will be substantiated as negotiations proceed. Nevertheless we recognize that our views would have to alter if, in one way or another, our assumptions did not prove to be well-founded.

BASIC ASSUMPTIONS

5. We believe that the development of a generally acceptable control system must proceed from the following assumptions:

(a) member nations will not be willing to surrender sovereign rights unless such a surrender applies with equal force to all members, and unless all important eligible countries become members;

(b) under present conditions Canada and the other countries supplying uranium to the United States and United Kingdom for their weapons programmes could not accept any limitation of the right to continue to do so;

(c) so long as the United States, the United Kingdom and the USSR continue to make nuclear weapons certain countries (e.g. France) will not be prepared to undertake obligations which would preclude them from doing likewise.

ANALYSIS

A. Control of Norwal Uranium

6. It is clear that most nations producing uranium will be directing it into two channels; the American, British or Soviet weapons programmes on the one hand, and world-wide non-military requirements on the other. The question which then arises is what, if any, conditions should the producing countries stipulate as a prerequisite to making uranium available to other nations for peaceful purposes. The Canadian view is that the only realistic approach to this question is to recognize from the first that any scheme involving a system of "double standards", whereby some countries could obtain uranium for their non-military programmes without inspection and where other countries could not, would be unacceptable. In other words, if uranium for peaceful uses is to be made available under the aegis of the Agency, and if this in turn involves acceptance of Agency controls, then all material to be used for peaceful purposes by any country, big or small, would have to be provided under the aegis of the Agency.

7. If this analysis is correct, then clearly the question of the degree of control to be imposed through the Agency is entirely dependent on what the principal atomic powers themselves are prepared to accept. The United States, the United Kingdom and the Soviet Union will have to lead the way by indicating the degree of control which they are prepared to permit the Agency to exercise over their non-military programmes. It is reasonable to assume that the principal producers of uranium will then follow suit and at the same time require other nations receiving materials from them to do likewise. It should be emphasized that, in our opinion, if the United States, the United Kingdom and the USSR are not prepared to accept Agency control over their non-military programmes, then the principal uranium-producing countries like Canada could neither accept Agency supervision of their own programmes nor with justification seek to impose similar restrictions on other nations wishing to obtain uranium from them.

B. Control of U235

8. The difficulty and cost of producing U235 is so great that the countries currently possessing separation plants should be able to impose controls, irrespective of the existence of the Agency, which would be likely to remain effective for some time. However we anticipate that if power reactor development favours the use of enriched fuels, other countries or groups of countries (e.g. a European atomic power pool) will wish in due course to establish separation facilities of their own, and we doubt that they will be prepared to give any pledge that such plants would be used solely for peaceful purposes unless the present possessors of such plants would do likewise. We should be greatly surprised if France, for one, did not take this position.

C. Processing Facilities

9. As indicated above we believe it will be easy for countries supplying U235 effectively to insist that receiving nations agree to have the material reprocessed after radiation in plants belonging either to the country of origin or to the Agency, but we do not think the same is true in the case of natural uranium except under the circumstances set out in paragraph 6 above. However, even if it did not prove possible to develop a control plan through the Agency it might be advantageous for the Agency to operate reprocessing plants for use by member countries on a voluntary basis, since economic compulsions would favour their use and might accomplish a measure of control that proved unattainable by political means.

CONCLUSIONS

10. You might sum up your remarks to your American and British colleagues by saying that we are convinced from our experience in negotiating with the Indians on the NRX reactor and from our discussions at the Tenth General Assembly during the debate on the Atomic Energy Resolution that the effectiveness of control accomplished through the Agency will be directly proportional to the degree of control which the United States, the United Kingdom and the Soviet Union are prepared to accept over their non-military programmes. This poses the obvious question: "What specific controls, if any, are they prepared to accept?".

11. You might conclude by referring to the view expressed at your last meeting (paragraph 6 of your telegram of December 16) that if the Soviet Union did not join the Agency, or refused to cooperate, controls would be undesirable since countries would then turn to the USSR for assistance rather than accept Agency supervision. Much the same argument would in our opinion apply if any politically significant nation or group of nations found the plan unacceptable, since, apart from the political animosities it would create, in the long run it would only serve to encourage the development of uneconomic uranium deposits and processing facilities outside the control of the major powers or of the Agency. Furthermore we doubt that the Soviet Union would long be able to resist the temptation to exploit such a situation to the disadvantage of the Western powers. It is for this reason that we stated at the beginning that our support for a control system is qualified by the proviso that it should be widely enough accepted and sufficiently effective in nature to have a reasonable prospect of success.

R.M. MACDONNELL
for Under-Secretary of State
for External Affairs