USA balances trade and proliferation concerns

Wednesday, 25 January 2012

A letter from senior US officials signals that the country will continue to seek nuclear trade agreements with conditions on enrichment and reprocessing implemented on a "case-by-case" basis.

The letter from deputy energy secretary Daniel Poneman and undersecretary of state for arms control and international security Ellen Tauscher was sent to the administration of President Barack Obama on 10 January. The text of the letter was published by a Global Security Newswire article on 23 January. It follows the recent conclusion of an inter-agency review process initiated in late 2010, which had sought to determine whether a so-called non-proliferation 'gold standard' should be a condition of all future bilateral nuclear trade agreements. This 'standard' refers to terms in the agreement negotiated with the United Arab Emirates in 2009, which consented to forgo its right to develop enrichment and reprocessing technology domestically.

"Each billion dollars of American nuclear exports supports 10,000 jobs, and provides the USA with access and influence over the direction of nuclear programs, ensuring they meet the highest standards for non-proliferation, security, and safety."

The fundamental justification for the decision is that insisting on the standard negatively impacts trade opportunities for US companies, which in turn restricts the country's ability to set non-proliferation conditions. At the same time other actions, such as those enforced by the Nuclear Suppliers Group and fuel leasing arrangements, were identified as offering a more effective means of preventing the spread of sensitive materials and technologies, without unduly restricting the competiveness of US suppliers.

The letter noted, "Our competitors are not standing still.  France and Russia in particular are very aggressive in pursuing nuclear business worldwide, and offer favourable terms.  Neither imposes ENR [enrichment and nuclear reprocessing] conditions in their agreements.  Each billion dollars of American nuclear exports supports 10,000 jobs, and provides the USA with access and influence over the direction of nuclear programs, ensuring they meet the highest standards for non-proliferation, security, and safety."

The letter also mentioned an imminent resumption of nuclear trade talks with Vietnam: "We plan to have an inter-agency team led by deputy assistant secretary Eliot Kang in Vietnam for talks beginning Wednesday [11 January]. Our team will explain to Vietnam the procedures in the USA for congressional review, and lay out a spectrum of options for addressing enrichment and reprocessing in a 123 [nuclear trade] agreement. This discussion will lay the groundwork for proceeding with negotiations."

Other countries likely interested in the news include Jordan, which is looking to develop a nuclear program and which has begun trade talks with the USA; and South Korea, a well established nuclear player that is negotiating a new agreement with the USA to replace one that expires in 2014. The terms of the existing agreement have prevented South Korea from engaging in reprocessing either domestically or overseas – to the vexation of the country's leaders who now see the technology as potentially being a valuable part of a waste strategy.

While by no means reflecting a final government decision, news of the review's conclusions will likely be well received by the US nuclear industry. A statement made in April last year by the Nuclear Energy Institute's senior vice president for governmental affairs, Alex Flint, urged congress to reject a bill that sought to introduce the standard.

Among other things he noted, "With the sole exception of United Arab Emirates, US requests that potential trading partners forswear enrichment and reprocessing activities have been publicly rejected as an infringement of their sovereign rights, which are protected by Article IV of the Nuclear Non-proliferation Treaty. It is clear that if the United States makes renunciation of enrichment and reprocessing rights a prerequisite for trade, the outcome will be few, if any, new Section 123 agreements."

Researched and written
by World Nuclear News