Inspections and international agreements are absolutely essential in the fight against terrorism, but to be effective, national governments have to possess the capacity to follow through on their commitments. Nuclear material is spread across more than 70 countries. Most of these countries have the resources and political will to establish national systems of accountancy and control, but some countries are too new, too poor, or too wracked with problems to accomplish the job without help from the IAEA.

IAEA assistance typically takes the form of equipment and training, but the scale of the agency's efforts -- particularly in the areas of physical protection and trafficking -- is quite small. The latest annual report indicates that the agency sponsored over 75 field visits involving nuclear safety. By contrast, no more than 3 visits were made in support of physical protection, a fact that the agency attributes to budget constraints. Similarly, the agency sponsors scores of training courses but only two on the topic of nuclear trafficking.

Security from nuclear terrorism is only as strong as the weakest link. Protecting radiological material will depend on IAEA's ability to help weak states build and maintain a system of nuclear protection. The IAEA can do much more to help these countries with their safeguards, physical protection, and border detection. It can provide training, peer review, testing, and support services to countries that would otherwise be unable to meet international standards.

The IAEA should also experiment on a pilot basis with developing a new programming element: incentives. Inspections may deter, and physical protection might improve security, but in the end, nuclear security will depend on the commitment of facility operators, employees, and the national regulatory authority. Performance incentives and other tactics can help build the local constituency for nuclear protection that will be necessary for security in the long-term.

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• Contribute $30 million to meet current safeguards objectives

Expand agency development and testing of verification technologies

Support amendment of the CPPNM

B. Assistance to Member States

• Increased support for safeguards, physical protection,

& anti-trafficking programs including...

These include visits of the International Problem Safety Assessment Review Team (IPSART), Operational Safety Review Team (OSART), the Peer Review of Operational Safety Perform Experience (PROSPER), the Safety Culture Enhancement Program (SCEP), the Engineering Safety Review (ERS), the Integrated Safety Research Reactors (INSARR), the Safety Review missions, the Internal Regulatory Review Team (IRRT), and the Peer Review of Radiation

Training/courses
Peer review
Testing

Support services

Technology transfer

• Incentives for participation and performance

C. Information Collection

Improve access to states and their facilities

Design information on every safeguarded facility

Improve information about stored radiological material

Improve information about nuclear imports and exports
Expand trafficking database

• Establish of Nuclear Trafficking Documentation Teams (NTDT)

• Establish laboratory network for forensic analysis

Another way to strengthen IAEA is improve its ability to collect information. This is one of the agency's core functions, and in virtually every area, there is more that the agency can do to help combat proliferation and terrorism. In general, the agency needs better access to states and their facilities. It would also benefit from having member states provide design information on every safeguarded facility, information about the character of radiological material housed at facilities, and better information about nuclear imports and exports.

The agency also needs to expand the scope and detail of the nuclear trafficking database. As it stands, the database depends on a country reporting information to the agency. As one might expect, the quality of that reporting varies. Fighting nuclear terrorism requires, however, that the international community collect every available fact about any incident of nuclear smuggling. The information is too valuable to lose. One solution is for IAEA to send a documentation team any time there is a report of smuggling. The Nuclear Trafficking Documentation Team, or NTDT, could collect public domain information, review court records, and interview officials. The team would not issue a report but instead simply collect information for use in IAEA's confidential database.

On the technical side, the agency should be allowed to establish a network of laboratories in nuclear forensic analysis. The network would enable the agency to analyze and trace radiological materials that were orphaned or captured from traffickers.

These initiatives would significantly strengthen the IAEA and reduce the risk that a terrorist would acquire the materials for a nuclear or radiological attack. The IAEA cannot act on any of these recommendations, however, unless it has the financial and political support of its member states, particularly the United States.

The Congress has the power to substantially upgrade the IAEA's effectiveness by providing financial resources to redress past budget shortfalls and to support new measures to combat terrorism. Other governments can be called upon to foot the bill, and they should, but there is no avoiding the fact that the US is the most important player here. It is the country that created the IAEA and it benefits the most from IAEA efforts to stop proliferation and prevent terrorism. US leadership, especially US financial leadership, is a prerequisite for strengthening the IAEA.

How much money is needed beyond the $30 million recommended to cover current safeguards? In response to Senator Cleland's second question, I review the agency's budget and present three funding alternatives.

3. As you state in your testimony, the number of nuclear states has not grown to the degree predicted 20 or 30 years ago.

How effective is the NPT today in addressing emerging nuclear states?

The NPT has been one of the greatest public policy successes of the 20th century. For over three decades, the treaty has worked to prevent the spread of nuclear weapons. In the years to come, the NPT will likely prove to be even more important. The next section looks at NPT's previous success, and the relevance of that success to today's proliferation challenges. The concluding sections look at two common criticisms of the treaty ("countries will cheat" and "inspections can be beaten").

I. NPT: Explaining Past Success

The NPT has been an unheralded success in preventing the widespread proliferation of nuclear weapons. Despite every prediction by experts and policy makers, nuclear weapons did not proliferate rapidly. We do not yet live in a world with 30 or 20 or even 10 nuclear weapons states. In fact, over time, the rate of proliferation has actually declined.

The rate of proliferation hit its peak in the 1960s, when three countries joined the nuclear club (France, China, Israel). Since then, the number of new countries acquiring nuclear weapons has decreased. There are many reasons for this unexpected success, but one of the most important causes was the NPT.

There is some dispute over North Korea's nuclear status, with some intelligence estimates reportedly suggesting that North Korea has one or two

It is no coincidence that NPT came into force in 1970, the very point at which the rate of proliferation begins its descent. Evidence from a variety of sources -- declassified documents, interviews, statistical data -- suggests that the treaty had a powerful impact on nuclear decision making, especially on countries that had nuclear weapons aspirations. In the absence of the treaty, the problem of proliferation -- and the danger posed by nuclear terrorism -- would be far

worse.

How did the NPT achieve this success? Many commentators associate the success of the NPT with the development of an international norm. My research, however, suggests that the effect of norms is a positive but secondary factor. Instead, the NPT's real influence has more to do with its ability to shape the internal political debates and bureaucratic battles of countries that consider going for the bomb.

Once a country joins the treaty, the pro-bomb forces within that country face an uphill political struggle. They have to persuade the country's leadership to either withdraw from the treaty or to

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The treaty drew a line in time and required that countries openly declare their nuclear intentions. It reframed the debate over nuclear weapons from a purely "defense issue to a broader "foreign policy issue" and in doing so, reshaped the the composition of the decision group. In short, the NPT defined the issue, influenced who got to sit at the table, and created a deadline for action. It also created political and bureaucratic winners and losers. Once a country ratified the treaty, the pro-nuclear constitiuency that had been

cheat. Both choices have obvious downsides. Withdrawing from the treaty will be correctly interpreted by other countries as a signal that the country is seeking nuclear weapons. Cheating carries its own risks. Both strategies require a major political commitment. In short, pro-bomb forces in NPT countries face numerous political and technical obstacles that make establishing a bomb program very difficult.

II. NPT Today: Preventing Future Proliferators

The treaty has been remarkably successful, but it also provides an invaluable tool for addressing today's proliferation threats. NPT-related safeguards are the largest element in the world's only existing system of nuclear accountancy. Virtually all states participate in an NPT or IAEA-based safeguards system. These safeguards are critical to the any future nonproliferation success, and as was discussed in Question 1, they are just as important from the standpoint of terrorism and material security.

Even without safeguards, a healthy treaty acts as a constraint, making it difficult for nations to go back and reconsider their nuclear posture. There are many countries that do not have nuclear weapons programs now, but that fifty years down the line, may be tempted. It could be Germany, Japan, Taiwan, South Korea-- or a country we cannot today imagine. A robust NPT makes backsliding or a reversal less likely.

The NPT also provides countries with a non-military option for responding to the threats posed by other nuclear weapons states. Egypt provides an especially good example. Egypt faces a potential nuclear threat from Israel. Countries in Egypt's position have a strong incentive to balance against the forces of their prospective enemy - matching the adversary weapon for weapon. The NPT has given Egypt another alternative. It has provided Egyptian leaders with a political strategy for dealing with a military problem. By embracing the NPT and using it to press for Israel's denuclearization, Egypt has found a way to counter the threat it faces without having to build its own nuclear weapon. Iran may find itself in a similar situation if Iraq acquires nuclear weapons, as could various countries in East Asia if there is an outbreak of proliferation in that region.

Finally, the NPT provides instrumentalities for countering countries that act on their nuclear ambitions. Together with UN Security Council resolutions on Iraq, the NPT provides the chief legal and political basis for action against a non-nuclear member state that has an active weapons program.

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One problem for bomb advocates is that the treaty's effect is "asymetrically progressive." Once a country is in the treaty, the tendency is for the country to make progressively stronger commitments to nonprolferation (e.g., agreeing to stronger safeguards over time). The result is that officals who want a bomb program find themselves in an ever tighening straight jacket.

Thirty years ago, North Korea and Iraq were not of the lists of countries that were considered proliferation dangers. Twenty years ago, no one considered the possibility that the Soviet Union would break up and that Ukraine would have to decide whether to keep or renounce its inherited nuclear