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THE INDO – US NUCLEAR AGREEMENT: TOWARDS BETTER BILATERAL RELATIONS By Dr. Lopamudra Bandyopadhyay After the first Pokhran test of 1974, India was subjected to an embargo on its civilian nuclear energy power generation programme. This embargo, which became more severe over the years, was initially sought to be enforced by the two countries with whom India had ongoing collaboration in commercial nuclear power generation – the U.S. and Canada. As a non-signatory of the NPT, this embargo, with some case-by-case exceptions, was also applied by the NSG, the nuclear suppliers group of 44 countries that engage in nuclear trade and commerce. The U.S. had supplied on a turnkey basis India’s first power reactor at Tarapur, a GE design light-water boiling-water reactor using slightly enriched uranium, and had signed an agreement to provide enriched uranium fuel for 30 years. After Pokhran I the U.S. essentially abrogated the agreement although it made one or two additional fuel shipments. France, Russia, and now China that have enrichment facilities, supplied fuel subsequently from time to time to keep the reactor in operation, though for many years it has operated at a fraction of its rated power level. India, however, earlier had an agreement with Canada to provide the technology for the CANDU reactors which use natural (non-enriched) uranium as fuel but heavy water (deuterium) as a moderator and a plant at Kota in Rajasthan was nearing completion of construction when Pokharan I occurred. Canada immediately terminated all cooperation and the Indian nuclear establishment was forced to develop and implement the technology indigenously at considerable cost and with many delays. With the exception of the first Tarapur plant and the two Russian-supplied VVER reactors under construction at Koodankulam in Tamil Nadu, all 15 operating power reactors in India are based on the CANDU design using indigenous natural uranium and heavy water produced in India (for which technology was procured initially from the Swiss company, Sulzer). The 1998 nuclear tests carried out by India resulted in further sanctions being imposed on her. At present, India has limited resources of natural uranium but these are running out and it is acknowledged that they will be insufficient to support even the current programme not to speak of an expanded programme as envisaged by the Department of Atomic Energy. It is in this respect that the Indo – US Civilian Nuclear Agreement which would allow India to freely import both fuel and, perhaps, more efficient technology is important.
New Delhi
and Washington had agreed to collaborate in July 2005, when
President George Bush vowed to end India’s total exclusion
from the international nuclear market. Bush conditioned this
promise on New Delhi’s separating its nuclear facilities
into military and civilian sectors and accepting International
Atomic Energy Agency (IAEA) safeguards on the latter group.
IAEA safeguards were supposed to ensure the recipients do
not use civil trade for nuclear weapons activities. Commencement of U.S. nuclear exports to India, however, requires completion of several other actions. The two sides must finish negotiations on a bilateral nuclear cooperation agreement, known as the 123 agreement, as per the relevant section of the U.S. Atomic Energy Act of 1954. India must also conclude a safeguards agreement with the IAEA, and the 45 – member Nuclear Suppliers Group (NSG) must reach consensus to permit nuclear commerce with India. Finally, U.S. lawmakers would need to approve the 123 agreement. A preliminary reading of the agreement - 22 pages and 17 Articles long - suggests a serious effort was made by both India and the U.S. to square a very difficult circle. Both sides made and received concessions and the consensus within Government of India — including the Department of Atomic Energy — is that this is a deal the country can live with provided it does not become the template for the Nuclear Suppliers Group when it considers changing its guidelines to allow nuclear commerce with India. In particular, Indian officials hope the NSG will not prohibit the sale of fuel cycle technology and components, or adopt a rule terminating cooperation in the event of an Indian nuclear test. While those are issues of the future, it is important to understand the extent to which the 123 agreement has addressed India’s concerns. The Indo-US, 123 agreement on civil nuclear cooperation says that India and the US will engage in full civil nuclear cooperation activities covering nuclear reactors and aspects of the associated nuclear fuel cycle. It also includes technology transfer on an industrial or commercial scale between the governments or authorised persons. The agreement will be implemented in a manner that does not hinder nor interfere with India's nuclear programme for military purposes. The text of the agreement was released simultaneously in New Delhi and in Washington. It says Washington will support an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India's reactors. The 22-page agreement provides for termination of the nuclear cooperation with one-year notice period but prior to that the two sides will hold consultations on the circumstances, including changed security environment that may lead to the cessation. The US is committed to engage with the Nuclear Suppliers Group (NSG) to help India to obtain full access to the international fuel market, including reliable, uninterrupted and continual access to fuel supplies from firms in several nations. The US will have the right to seek return of nuclear fuel and technology but it will compensate India promptly for the "fair market value thereof" and the costs incurred as a consequence of such removal. The US
will join India in seeking to negotiate with the International
Atomic Energy Agency an India-specific fuel supply agreement.
The US will support an Indian effort to develop a strategic
reserve of nuclear fuel to guard against any disruption of
supply over the lifetime of India's reactors. The civil nuclear
deal will remain in force for a 40-year period and can be
extended by an additional 10 years. India is to establish
a new national facility dedicated to reprocessing safeguarded
nuclear material under IAEA safeguards. In case of disruption
of fuel supplies, the US and India would jointly convene a
group of friendly nations such as Russia, France and the United
Kingdom to pursue measures to restore fuel supply. The agreement
allows enrichment of 20 per cent of isotope 235 of uranium
transferred under the pact. India agrees that the nuclear
material and equipment transferred to it by the US would be
subject to safeguards in perpetuity. Core Issues Dr. P. R. Chari has illustrated four basic issues that provide an overview to the present debate on the nuclear deal. First, have both countries over-invested in the deal? India needs to deepen its relations with the US, which occupies the apex of political, military, economic and technological power in the international system. The US needs to incorporate a democratic, multiethnic and rising India into its strategic fold to shape the evolving international system. It is arguable therefore that Indo-US relations will weather the fate of the nuclear deal, whichever direction it takes. Second, what are the compulsions informing both countries to negotiate this deal? India requires nuclear technology from abroad—specifically natural uranium for its heavy water reactors, low enriched uranium for its light water reactors, and technical information to hasten its fast breeder reactor programme. But it will not join the Nonproliferation Treaty or accept full scope safeguards. In lieu, the Bush Administration wishes to co-opt India into its strategic scheme for containing the growing challenge from China. In essence, the United States is sacrificing its commitment to the nonproliferation regime at the altar of regional diplomacy. This suits New Delhi. Besides gaining recognition for its nuclear weapon status, it can acquire nuclear technology and international finance to expand its atomic energy programme, while ceasing to be excluded by technology control regimes like the Nuclear Suppliers Group (NSG). Third, the intense debate in India on this deal has been frugal on assessing the place of atomic energy in India’s energy future. Only 3000 MWs, less than 3 % of its total power, is presently being generated by the Atomic Energy Commission (AEC), despite some 50 years of strenuous effort. The Sarabhai profile (1970) had envisaged the AEC producing 10,000 MWs by 1980. Now, it is promised that 30,000 MWs would be generated by 2022 and 63,000 MWs by 2032. How realistic are these targets, if the AEC’s past record is reviewed? No details are available on where the finances for this gigantic programme would be found or how the accentuated problems of reactor safety or waste disposal would be addressed. Apropos, wind power production over the last decade has crossed 4000 MWs. A willing suspension of disbelief is needed to accept the AEC’s grandiose schemes. Fourth, the centrality of the AEC in India’s nuclear decision-making processes has greatly accelerated after the Indo-US nuclear deal was reached on July 18, 2005. The AEC’s new centrality in the nuclear decision- making process is manifested by the Prime Minister conceding that any final agreement reached with the United States would be reviewed by a group of AEC retirees, which is a modality unknown before in the annals of the Indian administration. The Indian Nuclear Weapon Programme and its Strategic Implications India’s
nuclear weapons, as part of a large military force, are under
democratic civilian command and control. Its nuclear posture
is guided by a defined doctrine of no-first-use and the principle
of minimum credible deterrence. Not surprisingly, China defines its security needs in terms of nuclear policies of the other P-5 states, especially the US. But, the international nuclear security environment is even more complex. The nuclear posture review of the US for new weapons and missile defence systems, Russia’s plan to introduce new long range missiles, the ongoing programme of France for a new generation of nuclear-powered ballistic submarines and Britain’s potential plan of reviewing a replacement of the Trident systems – all reflect the potential complexities of future world nuclear security order. India cannot remain unaffected by such changes in the nuclear security environment. The Bush Administration, departing from the position taken by earlier US presidencies, has acknowledged India as a ‘responsible state with advanced nuclear technology’. It also implicitly recognises the de facto nuclear weapon status of India corresponding to its security requirements. It is important here to examine the non-proliferation lobby’s argument that “if nuclear weapons are the great equalizer, why would not China seek to use similar inducements to balance US power”, in case of competing interests in West Asia and Northeast Asia? Such an argument tends to equate the case of a transparent nuclear deal between two responsible states with the possibility of its replication by another NPT state with doubtful record of proliferation and its non-transparent deals. The Chinese effort to balance out US, within or outside the NPT obligations, will clearly continue in spite of the India-US deal. Moreover, before joining the NPT, China had enabled Pakistan to acquire nuclear weapon capability. Even after China joined NPT, its role in nuclear wheeling-dealing in the case of North Korea, Pakistan and Iran has been evident. To prevent nuclear weapon countries such as China from clandestine proliferation acts is a problem essentially related to the enforcement of international regimes and has nothing to do with India-US nuclear agreement. India, on the other hand, has not violated any international commitment either in the making or testing of its nuclear weapons. Its nuclear safety and security record has been internationally appreciated. As an established democracy there is absolutely no danger of India’s nuclear arsenal falling into the hands of any rogue elements. Also, in sharp contrast to countries like Pakistan, North Korea and China, India has never used proliferation as a tool of foreign policy. In fact, many of the nuclear proliferation problems of today are directly linked to the A.Q. Khan network. The uninterrupted involvement of Western suppliers in the Khan-led nuclear grey market, underlines the fact that US and other European governments failed to control these suppliers. The proliferation links of numerous non- state actors in Europe prospered along with Khan’s international nuclear black bazaar. The underground network of commercial black marketing involved a large number of countries, including the US, Germany, Britain, Canada, Spain, Italy, Switzerland, Turkey, Japan, and South Africa. The Director-General of IAEA has been quoted as admitting that Khan had commercial contacts with at least 20 different countries and large companies. As far as proliferation of nuclear weapons, technology or material is concerned, the future intention of a country is generally evaluated by its past behaviour. In this regard too India has an impeccable record of non- proliferation under an elaborate system of domestic export control mechanisms. It has also been conscious of the concerns of the international community. India’s vote against Iran, based upon IAEA’s findings, indicates that India expects everyone to honour accepted obligations and international commitments. India has adopted an overarching WMD domestic legislation, i.e., “The Weapons of Mass Destruction and Their Delivery Systems (Prohibition of Unlawful Activities)”. The procedures set in the new law are in tune with the UN Resolution 1540. The UN Security Council had adopted resolution 1540 on April 28, 2004 with the affirmation that proliferation of nuclear, chemical and biological weapons, as well as their means of delivery, constitute a threat to international peace and security. India has also taken conscious decisions to harmonise its legal arrangements with international export control regulations. Therefore, it is inappropriate to assume that “several countries, including Iran, North Korea, and perhaps Pakistan, would be expected to seek such (dual-use technology) items illicitly in India with its weakly enforced export laws.” Benefits for India Benefits
to India are immense with this deal. First and foremost, is
there the de-facto recognition of India as a nuclear power?
It is not clearly stated in the deal, but it’s an implicit
understanding. India missed this opportunity in 1970-78. It
is unlikely that this opportunity is to be missed again. Second,
is this the future recognition of India as a permanent UN
Security Council member? With a Trillion and a half dollar
economy (8% growth over ten years), India will make this grade.
When UN reforming movement gains strength in the future, India
will be right there and waiting for this opportunity. Fourth, this agreement will enable to build more nuclear power plants. At present it has 15 functional plants with an additional seven under construction. India stuck to it guns during the course of tough negotiations during the last few months. It did not agree to open all its nuclear facilities to international inspection. Instead, it ingeniously divided its facilities into "civilian" and "military" ones and agreed to open only the former to international inspection. According to currently available information, India will place 14 out of its 22 plants under the civilian list. Delhi thinks that the nuclear energy is the answer to its ever-growing needs for power. With this deal India will not have to depend totally on foreign oil and gas for its increasing energy needs. In a way the American acceptance of the Indian nuclear position is a reward to India for its consistent defiance and refusal to join the NPT. In contrast, the US is adamant to deny nuclear power to Iran which is not only a signatory to the NPT but has also signed an additional protocol which provides more transparency to Tehran's nuclear activities. The US wishes to engage India in its global schemes. India is already a military partner of the US. Since 2001 it has carried out 35 joint military exercises at sea, land and air, both in the US and in India. Indian Navy ships are already providing escort and security facilities to the American military ships passing through the Arabian Sea and the Indian Ocean on their way to and from the Pacific through the Straits of Malacca in Southeast Asia. Despite its willingness, a popular outcry did not allow the BJP-led Indian government to send Indian troops to Iraq to help out the American occupation forces. The only rationale behind the ongoing joint military drills is that there are certain plans for joint Indo-American military action in future. The US wants to use India as a bulwark in Asia against the Chinese dragon. This kind of cooperation will not go down well with Asia's emerging giant as well as with many popular and political forces within India. Delhi has also successfully sold to the US the idea that a democratic India is a great ally against the Islamic terrorism America is fighting at present. The withdrawal of sanctions against Delhi will help India in many ways. It will open the gates for Indo-US cooperation in lucrative space research and scientific cooperation in many fields which are currently barred to Indians. The US has refused to offer a similar deal to Pakistan. India, Washington says, has demonstrated that it is a responsible nuclear power. Pakistan, on the other hand, is accused of helping nuclear proliferation. There
is an urgent need in India for capital to build its infrastructure
and manufacturing base. And there is only one source to get
it i.e. the US & Europe. The US and Europe at this moment
are content with sending capital to China to supply them with
consumer goods. The former very cleverly had avoided exporting
manufacturing technology to supply high priced, high technology
capital goods to China. This component together with auto-parts,
pharmaceuticals and computer hardware could herald India into
big leagues in ten years and beyond. Commercial Aircraft manufacture,
ship building, factories to make giant power plants, steel
making plants, mining & drilling hardware, petroleum &
petrochemical plant building facilities could be ultimately
shared with India. The latter within ten years will have a
workforce sufficiently skilled to undertake all the foregoing.
It will be beneficial for the US. Labour costs in India, will
always stay a third of the US, and the European costs. That
will make India an ideal candidate for this technology transfer. “Corrective Measures” Enshrined in the Agreement Under Section 123a(4) of the U.S. Atomic Energy Act, every nuclear agreement with a non-nuclear weapons state must include a clause granting the U.S. the right to seek the return of nuclear material and equipment exported pursuant to the agreement, in the event of the recipient state exploding a nuclear device. Since the premise of the July 18, 2005 Indo-U.S. statement on civilian nuclear cooperation was that Washington was prepared to accept India’s de facto nuclear weapon status, the Bush administration should have ensured the waivers it sought to the Act covered this requirement for nuclear commerce as well. Unfortunately, it did not. When formal negotiations on the text of the bilateral nuclear agreement began, the U.S. made it clear the ‘right of return’ would have to be included. The Indian side had two options. It could either walk away or try to make the best of a bad situation by crafting balancing provisions. In choosing the latter, India’s negotiators sought to enshrine the commitments the U.S. had made in July 2005 and March 2, 2006, and protect the country from disruptions that would inevitably result from any American attempt to take back nuclear fuel or vital reactor components following an Indian test. A careful reading of the final 123 agreement — and in particular Article 5.6 on fuel supply assurances, Articles 13 and 14 on the procedures, Article 10.2 on safeguards and Article 16.3 on duration — shows that their efforts have been more than successful. A solid web of protection has been woven by the interlocking nature of all rights and commitments contained in the agreement. While the Bush administration can claim the “right of return” has been “preserved” and “protected,” the Manmohan Singh government can also state with confidence that this right has been so effectively boxed in as to render it harmless for all intents and purposes. To understand why this is so, let us consider a hypothetical situation of termination and see how the different layers in the agreement might conceivably work even in the worst case scenario at each stage. Assume the year is 2020, and India is running one 1000 MW U.S.-supplied light water reactor with low enriched uranium supplied by the U.S. India also maintains an LEU stockpile equivalent to 20 years consumption by the reactor, the bulk of which has been provided by the U.S. If on January 1, 2020, the Government of India were to test a nuclear weapon, the U.S. would immediately serve notice for the termination of the 123 agreement invoking Article 14.1. Under 14.2, India and the U.S. would then have to “promptly hold consultations” on the “relevant circumstances,” including whether India’s test “resulted from [its] serious concern about a changed security environment or as a response to similar actions by other States which could impact national security.” The importance of relevant circumstances is further reinforced by Article 13.1’s stipulation that consultations on termination would be between “two States with advanced nuclear technology” with the “same responsibilities and practices” as other such countries. If India’s test followed that of another country, the consultation process ought to end quickly and the notice of termination withdrawn. If the Indian test was “unprovoked,” India could still claim a change in the security environment. However, since this exercise is about worst-case scenarios, let us assume the U.S. is unmoved by India’s reasons. Though termination starts in one year after notice is served, Article 14.2 allows the U.S. to cease cooperation immediately if it feels the consultations under that Article are not going anywhere. By now, even if a few rounds of consultations have been held prior to cessation of cooperation, we would already be in, say, February. Once the cessation of cooperation takes place, Article 14.4 gives the U.S. the right to seek the return of nuclear equipment, material, and fuel transferred to India. This right can only be exercised after “cessation” and until the time termination actually takes place (i.e. by January 1, 2021, in our example). However, let us assume the U.S. invokes its right of return on February 1, listing not just LEU stocks for the reactor it supplied but also certain critical reactor components, knowing that the reactor would be disabled as a result. Once this notice is served on India and before any items can actually be returned, the U.S. is obliged under Article 14.5 to again consult with India. Indeed, the exercise of this right must pass through a number of legally binding filters. To begin with, consultations “shall give special consideration to the importance of uninterrupted operation of nuclear reactors” in India. Article 14.6 says no item can be returned without India being compensated “for the market value thereof and for the costs incurred as a consequence of such removal.” The latter costs are quite open-ended (which is why they do not figure in any other 123 agreement) and return cannot take place unless India and the U.S. agree on the amount of compensation to be paid. Article 14.7 also provides for one more hurdle prior to any return of nuclear material: India must satisfy itself that “that full safety, radiological and physical protection measures have been ensured in accordance with [its] existing national regulations” and that no risk will be posed to the “global environment” in the process of return. Even if India is able to stretch this process out for several months, there may come a time when the compensation and safety issues are finally sorted out. At this point, however, the process loops back because if the continuous operation of the U.S.-supplied reactor is no longer possible, this would violate the U.S. commitment in Article 14.8 that “the Party seeking the return of nuclear items shall ensure that the timing, methods and arrangements for return of nuclear items are in accordance with paragraphs 14.5, 14.6 and 14.7,” the most important provision of which is continuous operation of reactors. Accordingly, 14.8 provides for yet another round of consultations, this time aimed at addressing the “mutual commitments” to assured fuel supply contained in Article 5.6. To drive home this linkage, 14.8 states: “It is not the purpose of the provisions of this Article regarding cessation of cooperation and right of return to derogate from the rights of the Parties under Article 5.6.” So tight is this linkage between the right of return and the continuous operation of the U.S.-supplied reactor that the “timing” of any return, especially fuel, can only be calibrated with the replacement of U.S. material with material provided by other “friendly countries.” But what would happen in a scenario where no friendly country is willing to make good the fuel supplies the U.S. wants returned? This would trigger the situation envisaged by 5.6(c) — the right of India to take “corrective measures … to ensure uninterrupted operation of its civilian nuclear reactors in the event of disruption of foreign fuel supplies.” The legal status of these corrective measures has been further enhanced by three additional clauses in the 123 agreement. In 14.8, the U.S. recognises them as India’s “rights”; in Article 10.2, India explicitly states it is agreeing to place U.S.-supplied nuclear equipment and material under IAEA safeguards in perpetuity not in a free-standing manner but “taking into account Article 5.6 of this Agreement”; and Article 16.3 on entry into force and duration clearly states: “notwithstanding the termination … of this Agreement,” India’s rights under Article 5.6(c) “shall continue in effect” so long as U.S.-supplied material remains in India. No one in government has ever explained what these “corrective measures” might be. However, the 123 agreement’s clear link between the perpetuity of IAEA safeguards — even on U.S.-supplied material — and the assured supply of fuel for the lifetime of all of India’s civilian reactors provides a powerful deterrent to any U.S. desire to seek the return of exported material or terminate the agreement. For, once the U.S. invokes 14.1 and serves notice of termination, it is likely to set in motion a sequence of steps and counter-steps that could end with the suspension of safeguards by India. Under a worst-case scenario where the U.S. ignores its obligation to ensure the continuous operation of Indian reactors, presumably citing the Hyde Act, India would be under no obligation to entertain an American request for the return of nuclear items. If a U.S.-supplied fuel stockpile exists on Indian territory, India could continue using that fuel if not doing so means disrupting the operation of its reactors. Possession is more than nine-tenths of the law. However, the Indian Government of the day must be prepared to uphold its sovereign rights, even if it means incurring the wrath of the U.S. Conclusion In the post Cold War phase, the Bush Administration is of the belief that nuclear proliferation is the greatest threat to the US and the international community. There is a growing recognition and concern that the acquisition of enrichment or reprocessing facilities by a non-nuclear weapon state for peaceful purposes can alternatively also be used for a nuclear weapon programme. The US policy-makers and strategic analysts have been struggling for decades to find ways to prevent access to such technology to countries that do not have them. There has however been no tangible result in addressing this tricky issue under the prevailing non-proliferation regime. In explaining India’s position in this regard, the Foreign Secretary categorically stated in October 2005: “India is today a rapidly expanding industrial economy with a wide array of technologies that are relevant to proliferation. That in itself makes a case why our export controls and their effective implementation will matter more and more for global non- proliferation efforts.” As a country with an exceptional non-proliferation record, even without being a member of the NPT, India maintains a policy of non-transfer of enrichment and reprocessing technologies. Reaffirming India’s position before the international community, the Indian Prime Minister reiterated this longstanding commitment in the US-India Joint Statement of July 18, 2005 for the future too. The pre-eminence of US power in the global security system is quite apparent after the collapse of the Soviet block. However, it is difficult and even impossible for the US to successfully tackle security issues like terrorism and WMD proliferation without cooperation from other major countries such as India. Any future cooperation on the issues that have an effect on the core national interests of the two countries has to be durable and reliable. India has already demonstrated its willingness to contribute to the international struggle against terrorism. For example, at the crucial early stages of the global war on terrorism, in 2002 and 2003, the Indian Navy escorted US ships transiting the Malacca Straits with high value military cargo. As a victim of terrorism, India well understood American concerns.India has a shared interest with the US on the issue of non-proliferation.The source of proliferation in the neighbourhood has been of grave security concern for India as much as it is a cause of worry for the US and the international community. Illegal nuclear and missile transfers by China and Pakistan have not only made the task of successive US administrations difficult, they have also had serious consequences on international security. It would be therefore unwise for India and US to continue to fight such threats independent of each other. India as a nuclear weapon state, with an impeccable record of non- proliferation, has not sought to destabilize the nuclear order under the NPT, nor has its decisions in the nuclear field harmed US interests. Therefore, it would not be prudent and profitable to link US-India nuclear Indo-US Nuclear Deal and Non-Proliferation cooperation to the larger problems of international nuclear non-proliferation. Instead, the US lawmakers should consider the merits of the deal and allow the Bush Administration to build a long-term strategic partnership with India. The assumptions of any potential claim by China to accord a similar special status to Pakistan should also not come in the way of the US-India nuclear deal. The primary purpose of the Indo-US deal is to strengthen non-proliferation and not to scuttle it. China and Pakistan, on the basis of past records, can hardly make a similar claim. At another level, full cooperation in the nuclear energy sector betweenUS and India will help remove mutual misperceptions flowing from the hard line positions of the past that were based on principles and values regarding the nature of the international nuclear order. The attempt made by some eminent American non-proliferation experts in their testimonies at the US legislative bodies to bracket India with the countries of nuclear proliferation concern, such as Pakistan, North Korea and Iran, are bound to draw criticism in India as efforts to drag the Indo-US nuclear deal into unwarranted, unfortunate and absurd comparisons. As a state with a large nuclear programme that is outside the NPT, India’s intention to assume additional responsibilities, as proposed in the Joint Statement of July 2005, would clearly strengthen the international non-proliferation systems and not undermine them. India’s participation in global non-proliferation efforts would therefore be of great advantage to the US and other concerned states. |