no NOT TYPE IN THIS SPACE BYwi ll Security Clcm'i cation FOREIGN SERVICE DESPATCH Egg 9% FROM Resident Delegation E00500 8 Geneva Switzerland TO nu DEPARTMENT OF TATE WASHINGTON August u w a 4 a F F rfz r7 677 Z6 747 SUBJECT Aus tr ali an Commen IAEA 3 mm aims to nedmify concumncc of h 0 Th 2012953 251 55 0 following confidential memorandum prepawgdah the Australian Department of external Affairs is an evaluation of the International Atomic Energy Agency It was prepared at the request of hxternal Affairs because of the waves of ease imistic reports which have emanated from Vienna to London faris and Canberra 96 It was Liven to a member of the United States Delegation to 00500 not by the Australian Delegation b t by a third party and its confidential character should be protected One of major factors in si uati appears to be recentmmoves by Euratom he understand that sUhaEOh is planning to install million kilowatts of nuclear power by 1963 and that to achieve this goal it is negotiating agreement with United States for technical assistance materials and equipment and financial aid United ingdom is also apparently seeking to conclude an agreement with Euratom It appears that major hold up in United States Euratom negotiations is Lhratom insistence that safeguards shouhi be applied and policed by Euratom itself and not by or United States United St ates would only be allowed to carry out periodic audit checks to see that Euratom safeguards system was working properly and IAEA would have no rights he understand that Euratom stand has caused considerable difference of opinion amongst United States authorities with State Department gene- ally sympathetic and USAEC generally opposed alt ough itself divided on issue Outcome of negotiations appears to es in doubt but in View of United States interest in West European integration and economic develop ment its interest in rapid development of peaceful uses of atomic E3 energy and commercial stake in agreement ouratom would use United States M1ater reactors it s- ems unlikely that negotiations W1 ll ul time ly br ak dotgm n ll im l 5 3 AEFAI 8PM UEco afar 1L is Kama SIRE a - am gush-em ACTION DEPAR - NT 0F STAT ea must return this permaheut record copy to les with an mam-W lcontinuance of its present special status A 1 I 5 Ha L42 _of 3 sea Claui htion Deep 8 From I Should agreement be concluded in above lines it will mean that international arrangements to assist atomic energy develop ment'and guard against its diversion of nuclear materials to non peaceful uses for a most important part of world includin nations most likely to develop nuclear power in near future will be completely outside control of Agency Effect on I A E A could be serious Similar arrangements might for other advanced countries in Eastern Europe and result could be that Agency energy for considerable time In these circumstances it could well be difficult for many nations to sustain active interest in Agency And yet Western countries at least have made something of a political investment in setting up the Agency not to mention the fairly substantial contributions entailed in a budget of around $7 million Removal of Euratom countries from I A E A safeguards system would also tend to confirm apprehensions of India and many under- developeds that Agency safeguards obligations will rest only on have-not countries and could also eXpo-e United States to Soviet charge of insincerity in its sponsorship of Agency safeguards system Adverse effect on future of Agency as well as on feasibility of establishing Agaicy safeguards system are obvious Another factor which bears on future of Agency is development of atomic energy nrogrammes by Specialised agencies and other inter- nati nal bodies We have consistently supported primary responsi- bility of I A E A for development of all aspects of atomic energy but it appears that some agencies will not only be reluctant to concede Agency primacy in atomic energy fields already entered by them but are actually entering new fields Thus F A 0 and W H 0 have recently adopted programmes for the use of radio active isotopes for agricultural and medical purposes and despite nominal recognition of need for consultation with I A E A and avoidance of duplication it appears that specialised agencies will be inclined to pursue their programmes without too much regard for I A E A claims I L O and UNESCO likewise have atomic energy programmes In radiation field there also appear likely to be some tendency towards duplication of functions and differences of opinion regarding division of responsibility between IAEA and Radiation Committee may develop Value of Agency will clearly be affected by result of these developments which could reduce considerably its real scope and practical responsibility fa international atomic energy development If it were to become only another international agency carrying out atomic energy functions not otherwise allocated and not including for the moment power reactors it might be hard to justify I It is zduevasta 1 1 1 i Pay Lei I End No c Claui cation Dcsp New 8 From It is even possible that Agency may not be able to pay role I envisaged by Sponsors of broker for transactions involving nuclear materials and equinment Direct supply as to muratom and competition between suppliers may make it difficult if not impossible for Agency to set up effective measure of handling such transactions Another factor is difficulty experienced for technical and political reasons in getting Agency under way and starting on effective programme of work This may be to some extent inherent in that Agency is attempting to co or inate efforts of countries of widely differing levels of technical and economic ievelopment and may continue even after initial period We understand that above an other ccnsiierations have caused some pessimism about future of Agency in minds of some of people closely associated with its work so for July 2h 1958 Halter Deputy D S epresentative as - 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