The Nuclear Suppliers Group (NSG) is responsible for establishing guidelines that govern the international transfer of nuclear-related materials, equipment, and technology. The NSG today faces a host of challenges ranging from questions about its credibility and future membership to its relationship with the Nuclear Non-Proliferation Treaty (NPT) and other multilateral arrangements.

Carnegie’s Mark Hibbs discussed his latest report, The Future of the Nuclear Suppliers Group, drawn from a high-level workshop of NSG member states. His report and presentation offered unrivaled insights on the NSG’s dilemmas and possible ways to resolve them. Carnegie’s George Perkovich moderated.

The NSG in Historical Context

• Origins and Mission: After India exploded a nuclear device in 1974 using equipment and materials supplied by Canada and the United States, a group of seven nuclear supplier states established the Nuclear Suppliers Group to control nuclear trade. Hibbs explained that the group was formed on the premise that the Nonproliferation Treaty (NPT) alone would not suffice to prevent the export of critical nuclear items to parties with nuclear weapons ambitions. The NSG members in 1978 quickly agreed upon a list of goods that trigger safeguards on exports.
   
• Widening Scope of Controls: The NSG did not meet again until 1991, following the exposure of Iraq’s clandestine nuclear procurement program, Hibbs said. In response, the NSG extended the scope of its rules for global nuclear trade.
   
• The Twenty-first Century: In recent years, the NSG has been increasingly challenged by the emergence of complex proliferation networks, opportunistic exporting policies of supplier states, and the globalization of the nuclear trade environment, Hibbs argued. 

Current and Future Challenges 

• China’s Nuclear Trade with Pakistan: Hibbs explained that when China joined the NSG in 2004, under the group’s guidelines Beijing committed not to export nuclear items to Pakistan, a nuclear-armed state outside the NPT. In 2010, however, Beijing announced that it intends to export two power reactors to Pakistan. The NSG therefore must decide how to respond to China’s apparent noncompliance with the group’s guidelines in a way that is least damaging to the export control regime.
   
• NSG Membership and Relationship to the NPT: The Chinese challenge brings to the fore broader questions of how the NSG will manage its relationship with states outside the arrangement and how the NSG defines itself with respect to the NPT, Hibbs explained. In particular, NSG members must decide how to approach non-NPT parties that are nuclear suppliers. India’s intention to apply for NSG membership will challenge how the NSG responds to a changing international security environment, he added.
   
• NSG Decisionmaking: Decisions about the content of NSG guidelines and other matters are made by consensus, Hibbs said. Since its inception, the NSG has grown from a group of seven developed countries to a group of 46 governments that represent a diverse group of states. As the group has grown, reaching a consensus on important decisions has become increasingly difficult. Members will have to address whether the consensus principle is sustainable. Hibbs noted that without a resolution of this problem, the NSG’s future as a global nuclear trade rule maker will be in doubt.
   
• Adjustment to Globalization: In the expansion of global trade, the NSG will have to decide how to review and update its control lists for nuclear and dual-use items, Hibbs explained. Furthermore, with the anticipated growth in volume in nuclear trade and the increasing complexity of project financing and outsourcing, the NSG will have to confront issues raised by the growth of transshipment and trade brokering.  

Possible Solutions and Improvements

• Effectiveness and Enforcement: Hibbs recommended the creation of a working group to investigate how to expedite data-sharing and feedback among participating governments in addition to a peer review process of national implementation of NSG guidelines. 
   
• Transparency and Outreach: Hibbs also suggested the NSG establish or intensify contact with several key stakeholders, including NPT Review Conference working groups, nuclear industry firms, and nonparticipating transshipping states. The NSG should also clarify its procedures concerning information about transactions which member states deny under the guidelines, in the interest of effectiveness and objectivity, he said.
   
• The NSG at a Crossroads: The NSG must rigorously challenge its own habits and procedures to remain a credible body and to effectively control a greater trade volume in the future, Hibbs argued. Cooperation with the UN Security Council’s 1540 Committee would provide the NSG an avenue to promote the worldwide acceptance of export controls and to universalize its guidelines. He concluded that recent developments in international nuclear trade demonstrate that the NSG must remain an essential instrument to prevent nuclear material, equipment, and technology from getting in to the hands of those who seek to develop nuclear arms.