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Taking a Closer Look at South Korea, Section 123 and the "Gold Standard" When it Comes to Nonproliferation

Ted Jones of NEI
The following is a guest post by Ted Jones, Director of International Supplier Relations for NEI.

Global Security Newswire recently published an article that quotes Tom Moore, a well-regarded nonproliferation expert at CSIS, that South Korea is a “gold standard state.” Mr. Moore has graciously posted my response to this assessment of South Korea in a blog post at Arms Control Wonk. In my comment, I explain that while it may be correct that South Korea’s domestic development of enrichment or reprocessing technologies is inconsistent with the 1992 Joint Declaration on Denuclearization of the Korean Peninsula, the pact between the Koreas is distinct from the “gold standard.” I argue that conflating the two commitments obscures a critical lesson that the case of South Korea can offer to U.S. policymakers about the “gold standard” as a universal policy:
The important lesson of U.S.-ROK nuclear cooperation is that a Section 123 agreement without the “gold standard” can nonetheless be an essential instrument of U.S. influence on international nuclear security and nonproliferation. The most powerful source of U.S. influence over South Korea’s E&R policies and activities is the U.S. consent right, contained in the current Section 123 agreement, over South Korea’s reprocessing of U.S.-origin fuel. The long-term successor agreement will extend this consent right to used fuel from non-U.S. reactors, and to South Korea’s enrichment and storage of plutonium or highly-enriched uranium. These consent rights, plus 8 other nonproliferation assurances and guarantees, are required in a “standard” Section 123 agreement. It is also important to note that the extensive U.S.-ROK commercial partnerships enabled by the agreement have significantly enhanced U.S. influence over nuclear energy both in South Korea and in markets, such as UAE, supplied by ROK in partnership with U.S. companies. 

As the United States resumes negotiations of the long-term successor agreement with South Korea, plus 6 other renewal agreements set to expire by 2015 and new agreements with Vietnam, Jordan and Saudi Arabia, it is crucial that the consequences of tying U.S. nuclear cooperation to acceptance of the gold standard are clearly understood. Among the 10 agreements, only Taiwan has indicated its willingness to forswear E&R in a Section 123 agreement. Given that Taiwan committed to the United States decades ago never to acquire E&R, its willingness to incorporate its existing commitment into a Section 123 agreement represents little change. Vietnam and Jordan have made clear that they are not interested in negotiating Section 123 agreements that would require them to forfeit E&R rights. Negotiations with both countries began in 2010. Talks with Saudi Arabia began last year, and it is doubtful whether Saudi Arabia will accept the U.S. request to forswear E&R.
The reporter of the Global Security Newswire articleElaine Grossman, also gives the misleading impression in writing that “other nations have gone in the opposite direction [on enrichment and reprocessing] – most notably the United Arab Emirates.” In fact, no other nation has followed UAE in accepting the “gold standard.” She mentions that Taiwan is “poised to offer a similar pledge,” but neglects to point out that Taiwan already has a decades-old commitment to the United States not to develop enrichment or reprocessing technologies. And Ms. Grossman omits that multiple negotiations of Section 123 agreements remain snagged on the “gold standard” issue. This leaves an impression of an emerging trend of countries forswearing enrichment and reprocessing rights, when in fact the opposite is the case.

Editor's Note: In June 2012, NEI recorded an interview with Dan Lipman of Westinghouse concerning the renewal of the 123 agreement with South Korea and why it was important to the bilateral relationship between the two countries. A few weeks later, Dan returned to the same topic when he was interviewed by Alan Ahn of the Global America Business Institute.

Comments

Martin Burkle said…
South Korea wants to compete in the world market for nuclear services. Going forward, the chief competitors are Japan, Russia, and China; but not the United States. Remember, Westinghouse is a Japanese company. Will the United States negotiate a 123 agreement with South Korea's competitors? With future 20 billion dollar contracts to be signed, It would seem to me that South Korea has large economic reasons to want equal footing with its competitors. Why shouldn't South Korea seek equal footing?

2nd question
It seems that the DOE and the State department do not agree about reprocessing using the pyro-processing technique. The DOE does pyro research and ships it off to South Korea for evaluation. The state department issues statements that pyro-processing is reprocessing and therefore a proliferation risk (no explanation is given that I can find). Why does the DOE cooperate with the South Koreans to develop a process which the state department says is a proliferation risk?

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