JAEA Nuclear Non-proliferation Policy Letter No.0001 2012.07.05
<< Obama Administration's new approach to enrichment and reprocessing on the negotiation of bilateral nuclear cooperation agreements >>
Tsukasa Yamamura1
This article does not represent the view of JAEA and the author alone is responsible for the facts and opinions expressed in this article.
1. Background
The Agreement for Cooperation Between the Government of the United States of America and the Government of the United Arab Emirates concerning Peaceful Uses of Nuclear Energy (hereinafter referred to as "U.S.-U.A.E. Agreement"), which was signed on May 21, 2009 and entered into force on 17 December of the same year, contained provisions which are unprecedented in the 123 agreements2 which the United States has concluded in the past.
Among other things, the U.S.-U.A.E Agreement was unique in that the U.A.E has accepted the legally binding obligation not to pursue enrichment and reprocessing in its territory3 while agreements the United States has concluded so far with other states in accordance with the 1954 Atomic Energy Act, as amended by 1978 Nuclear Non-Proliferation Act, only grant the United States consent right for cooperating Parties' activities including enrichment and reprocessing using U.S. -obligated nuclear material4.
The US-UAE Agreement was lauded by key congressional members on this issue5 and U.S. nuclear non-proliferation community as a model for the future 123 agreements and was even called the "Gold Standard.6" The bill to amend the Atomic Energy Act, which, among others things, requires affirmative vote by Congress for the entry into force of the 123 agreements which do not contain the legal ban on enrichment and reprocessing, was passed in the House Foreign Affairs Committee on 14 April 2012.
However, in 2010 during the process of the negotiation of the new 123 agreements with Jordan and Vietnam, it became evident that the Administration was divided on whether to seek the U.A.E -type legal ban on the enrichment and reprocessing in all future 123 agreements or to take a more flexible approach. To resolve the internal difference, inter-agency review was made.
- Requirement of the entry into force of the Additional Protocol of the U.A.E for the export of nuclear material and equipment from the United States
- Programmatic advance consent for the retransfer of spent fuel from the U.A.E to France or the United Kingdom for the storage or reprocessing
Daily Press Briefing, August 5, 2010
http://www.state.gov/r/pa/prs/dpb/2010/08/145750.htm
2. Obama Administration's new approach and the response
After the inter-agency review of the policy on the future 123 agreements which lasted for more than a year, Obama Administration eventually decided to take a case-by-case approach on whether to seek a legal ban on enrichment and reprocessing7, In this approach the Administration will judge how to deal with enrichment and reprocessing taking into account a partner's domestic policies and laws, proliferation concerns and negotiability8.
To this new approach, criticism has been expressed from the key congressional members, national security experts, including former Bush Administration officials, and the nuclear non-proliferation community.
Global Security Newswire, May 4, 2012
"Nuclear Trade Reform Bill Faces Hostile Lobbying, as Obama Team Renews Policy Review"
http://www.npolicy.org/article.php?aid=1139&tid=5
3. Administration's argument
Obama Administration argues that, in order to retain the influence on the partner states' nuclear program, they need to negotiate the agreements the partners can accept. Otherwise the United States would not be able to negotiate the agreements and thus would lose the global nuclear market to other states such as France and Russia as well as the leverage on partner states' nuclear program which the United States has retained with the 123 agreements as an important tool.
4. Argument of the advocates of Gold Standard
The advocates of the Gold Standard consider Administration's new policy as a retreat from the great achievement of the U.S.-U.A.E Agreement. One of the arguments they make to justify their position is that the new policy undermines efforts to stop Iran from acquiring nuclear weapons. They also argue that it could prompt UAE to request the re-negotiation of the U.S.-U.A.E Agreement in accordance with the Agreed Minutes to the Agreement.
In response to the Administration's justification, they argue that U.S. vendors have already lost competitiveness in the global nuclear market and whichever policy the United States will adopt, the consequence may be the same.
One of the advocates suggests that the United States should exploit the leverage on the foreign suppliers' interest in the U.S. nuclear market and encourage other supplier states to change the policy in line with the concept of Gold Standard, rather than change its own policy9.
Testimony of Henry Sokolski, Executive Director, The Nonproliferation Policy Education Center
Submitted to The House Committee on Foreign Affairs "The Global Nuclear Revival and U.S. Nonproliferation Policy"
March 17, 2011
http://foreignaffairs.house.gov/112/sok031711.pdf
5. Gold Standard approach v.s. case-by-case approach
In my view, the concept of Gold Standard has an inherent difficulty. The basis of the acceptance of U.A.E of legal ban on enrichment and reprocessing is that it forbids these activities in its own domestic legislation. In this respect the U.A.E is the unique case. As far as I know, there are no other states which have adopted this policy in the domestic legislation10.
The anxiety among the Non-Aligned Movement (NAM) on the issue of the multilateral approach to nuclear fuel cycle, including the international nuclear fuel bank, demonstrates that, even if states do not have an intention to pursue enrichment and reprocessing, they might hesitate to forswear them as a legal commitment in that the benefit for the peaceful use of nuclear energy including enrichment and reprocessing is perceived as a quid pro quo for the renouncement of nuclear weapons option as part of NPT's bargain.
Traditionally, the United States has taken a flexible approach on the enrichment and reprocessing activities of its cooperating partners to the maximum extent within the limits of the requirements of the Atomic Energy Act. For example, the United States has granted programmatic advance consent to plutonium use by such nuclear advanced states as Japan, EURATOM and Switzerland. In my view, the concept of Gold Standard is contrary to the moderate policy the United States has pursued since the era of Regan Administration.
The bilateral nuclear cooperation agreements that France and Russia conclude with cooperating states do not normally include consent right on enrichment and reprocessing. If the United States adopts an approach of the Gold Standard, it means the gap between U.S. requirement and those of other supplier states will become wider. Although it might not be realistic to expect to completely harmonize the provisions of bilateral nuclear cooperation agreements among supplier states, too wide a gap for the requirements among major supplier states will undermine nuclear non-proliferation efforts as recipient states will tend to seek nuclear material or equipment from supplier states which impose less strict conditions.
It is true that the United States is no longer a dominant player in the global nuclear market, but it has not completely been out of the market. Furthermore, if the United States succeeds in the development of the reactors of innovative design such as Small Modular Reactors (SMR), there is a chance for the United States to regain the status of major suppliers.
Some advocates of the Gold Standard suggest the United States should exploit the interest of other supplier states in the U.S. market. I doubt that the United States nuclear market is big or attractive enough to change the policy of other supplier states.
Although I prefer the case-by-case approach to the concept of the Gold Standard, the case-by-case approach is not free from its own difficulties. This approach means that the United States asks some states to forswear enrichment and reprocessing, while it does not ask other states to do so. The difference of approach on whatever grounds might be seen discriminatory and the United States might not easily succeed in persuading states to accept the legal ban on enrichment and reprocessing.
So in my view, the United States should stick to the traditional policy of keeping its leverage through the consent right on U.S. -obligated nuclear material.
6. Japanese perspective
There are two ways in which the Gold Standard approach might potentially affect Japan. One is the effect on future potential amendment of the Agreement for Cooperation between the Government of the United States of America and the Government of Japan Concerning Peaceful Uses of Nuclear Energy (hereinafter referred to as "U.S. -Japan Agreement"). The U.S.-Japan Agreement will be extended indefinitely after the original term of 30 years unless either Party terminates the Agreement by giving six months written notice. In case Japan or the U.S. seeks to amend the Agreement, the proposed amendment of the Atomic Energy Act in its current form might possibly affect the amendment of the U.S.-Japan Agreement.
The other way that the Gold Standard might affect Japan is the case in which U.S. suppliers and Japanese suppliers jointly export nuclear reactors or equipment to third states. In such a case if the U.S. companies can't export equipment because of the lack of the 123 agreements, Japanese companies will not proceed with this joint project even if Japan has its own nuclear cooperation agreement in place with such third states.
In these respects as well, I hope that the United States will adopt a more flexible approach for nuclear cooperation agreements.
7. Conclusion
The United States runs the risk of alienating other states by insisting on too strict requirements in its nuclear cooperation agreement. It is not good for global efforts on nuclear non-proliferation and from the perspective of Japan which, I believe, is an important partner in the nuclear field in terms of nuclear non-proliferation as well as nuclear business.