Wednesday, October 23, 2013

Why Nuclear Energy Cooperation with Vietnam Serves U.S. Interests

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

In a piece published by National Review Online, Henry Sokolski and Victor Gilinsky urge the U.S. Congress to oppose the U.S.-Vietnam nuclear cooperation agreement unless Vietnam matches the United Arab Emirates (UAE) in renouncing technologies for uranium enrichment and used-fuel reprocessing (E&R). 

Sokolski and Gilinsky are out of touch with the current realities of nuclear diplomacy and trade.  The inclusion of new nonproliferation requirements in bilateral nuclear cooperation agreements is just one of many tools used by the United States to restrain the spread of E&R.  U.S. insistence on renouncing E&R in bilateral nuclear cooperation agreements will not be persuasive to most countries.  It will also harm multiple U.S. interests – including interests in nuclear safety, security and nonproliferation – which are advanced by U.S. nuclear cooperation and supply.  A few points to consider:

1. U.S. cooperation advances nonproliferation interests.  The authors recommend a “strict, uniform policy” that conditions U.S. nuclear cooperation on a partner country’s renunciation of its rights to uranium enrichment.  But such an inflexible approach would be counterproductive to nonproliferation interests.

In a piece recently published by the Carnegie Endowment, nonproliferation experts Mark Hibbs and Fred McGoldrick examine in detail how the United States should approach E&R in nuclear cooperation agreements and in the Vietnam agreement in particular.  They conclude that

“Using U.S. bilateral agreements as a lever to limit the spread of ENR may sound like a good idea. But for a number of reasons, insisting that all countries legally forgo ENR for all future U.S. peaceful nuclear cooperation agreements risks undermining U.S. nonproliferation interests.”

Hibbs and McGoldrick note that recent U.S. initiatives to deny E&R technologies have succeeded only in provoking widespread opposition from non-nuclear weapons state parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).  Few of these countries have any interest in developing E&R facilities but oppose attempts to deny what they regard as their sovereign rights, which are protected by Article IV of the NPT.  A no-E&R requirement for U.S. nuclear cooperation would open the United States to charges that it is undermining the NPT, and “inevitably diminish U.S. influence within the NPT regime and weaken the already-fragile bonds that hold the treaty together.”

The end result of a universal no-E&R requirement “would be to push the United States out of many nuclear markets,” Hibbs and McGoldrick warn. No other nuclear energy supplier country demands no-E&R terms for nuclear trade, and none is likely to do so.  United States would lose not only exports and jobs, but also the nuclear cooperation agreement itself, which is “an important bilateral legal instrument to influence other countries’ nuclear behavior.”  Without a nuclear cooperation agreement, the United States would lose nine nonproliferation assurances and guarantees from the partner country, including consent rights that other nuclear supplier countries do not require. By precluding U.S. nuclear supply arrangements, the United States would also lose the ability of U.S. personnel to identify potential red flags in the other country’s nuclear energy program.

As Hibbs and McGoldrick note, a universal no-E&R policy would “do nothing” to mitigate the larger proliferation risk posed by clandestine activities.  By insisting on no-E&R conditions, the United States would also encumber its efforts to gain broad acceptance of more useful nonproliferation commitments, such as the IAEA Additional Protocol. 

They conclude that a case-by-case approach to addressing E&R issues in Section 123 agreements is the “realistic and effective” approach to handling E&R in nuclear cooperation agreements, and “may lead to greater overall effectiveness of U.S. civil nuclear energy and nonproliferation policies.”  Applying this approach to the Vietnam agreement, they write:

“Based on what is reported to be in that agreement, it would appear Washington and Hanoi have reached a joint political understanding that Vietnam has no intention of engaging in ENR activities. An agreement along these lines would strengthen the economic and energy ties between Washington and Hanoi, promote U.S. strategic objectives in East Asia, and reinforce the global nonproliferation regime.”

McGoldrick and Hibbs are not alone.  Secretary James Schlesinger, Secretary William S. Cohen and other former national security leaders warned earlier this year that a one-size-fits-all approach would “weaken the non-proliferation regime” by encouraging nations to “turn to suppliers that do not impose difficult standards.” 

Nonproliferation experts Miles Pomper and Jessica Varnum of the Monterrey Institute recently noted that “concerns about a mass rush to enrichment and reprocessing appear to be overblown,” making a universal no-E&R policy a “solution in search of a problem.”  Indeed, only a few countries possess E&R technology and legal transfers have occurred only rarely, and with strict oversight. Since the establishment of the NSG in 1974, no NSG member has transferred E&R technologies to a state that did not already have E&R capabilities. 

2. U.S. cooperation advances nuclear safety.  Citing no evidence, Sokolski and Gilinsky claim that “there is no adequate safety agency” in Vietnam.  In fact, Vietnam has taken deliberate steps to develop its nuclear energy program consistent with the highest safety standards.  Vietnam established the Vietnam Agency for Radiation and Nuclear Safety and Control and the Vietnam Atomic Energy Institute in 2008 as the two main agencies responsible for nuclear safety and security.

Vietnam has worked closely on nuclear safety issues with the IAEA and leading nuclear energy countries, including the United States.  Vietnam’s Ministry of Science and Technology signed a nuclear security cooperation agreement with U.S. National Nuclear Security Administration in 2007.  The following year, Vietnam began receiving technical assistance from the U.S. Nuclear Regulatory Commission (NRC). That assistance deepened in 2009 when Vietnam became a pilot country for the NRC’s New Reactor Assistance Program. Vietnam has also received technical assistance from Japan, Korea and Russia.  Like other countries developing new nuclear plants, Vietnam and its foreign partners are incorporating lessons from Fukushima, including new risk assessments for earthquakes and tsunamis. 

If U.S. suppliers are enabled to export to Vietnam advanced reactor designs and world-class operational expertise, they will further enhance nuclear safety in the country. 

The authors cite nuclear safety is a reason “to be cautious about pushing nuclear power in Vietnam,” but Vietnam’s nuclear energy program is well under way with no “push” from the United States.  And preventing U.S. nuclear cooperation would only harm the interest of nuclear safety in Vietnam.

3. The Vietnam nuclear energy market.  The authors also take aim at the economic benefits of U.S. nuclear energy exports to Vietnam.  They scorn projections of the Vietnam nuclear energy market as “wildly optimistic” but provide no actual evidence to challenge industry and government estimates.  Vietnam’s nuclear energy plans, developed in cooperation with the IAEA and foreign partners, call for 10 GW to 15 GW of nuclear generating capacity by 2030.  The first two plants, supplied by Russia, are scheduled to begin construction next year at a southern coastal site and come on line in 2020.  Two additional plants, supplied by Japan, will be constructed in the same province.  An additional 6-11 plants are planned at up to 8 sites in 5 provinces.  Vietnam has indicated strong interest in partnering with U.S. suppliers.

The authors cite the lack of U.S. nuclear exports to India as evidence that international nuclear energy markets are overstated.  But the reason that significant U.S.-India nuclear trade has not yet occurred nothing to do with India’s market demand or India’s interest in U.S. procurement.  The issue is India’s flawed domestic liability law.  Unique in the world, the Indian law has prevented Indian cooperation with foreign and domestic suppliers alike, and must inevitably be reformed to enable India to achieve its nuclear energy plans.

The potential for nuclear energy exports to Vietnam and other countries is far from the “old saw” claimed by the authors.  That the global market for nuclear energy is very large and rapidly growing is plain in the numbers.  According to the World Nuclear Association, 434 commercial nuclear reactors are in operation around the world.  72 are under construction, and another 167 are planned or on order. 

To maintain U.S. influence over global nonproliferation policy and international nuclear safety, the U.S. commercial nuclear energy sector must participate in these markets.  Without U.S. commercial engagement, the United States would have substantially diminished influence over other nations’ nonproliferation policies and practices. U.S. technology and U.S. industry are a critical engine that drives U.S. nonproliferation policies. A successful nuclear trade and export policy must go hand in hand.

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