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While the Park-Obama summit has rightly been seen as a success so far, it was preceded by one small diplomatic failure: the inability of the two sides to reach agreement on a new nuclear cooperation or “123” agreement (after the relevant section of the 1954 Atomic Energy Act).
The existing agreement does not lapse until 2014. But the timeline for the Congressional option to review the accord required that terms be settled prior to the summit; for South Korea, agreement was a hoped-for deliverable. During their joint press conference, President Obama made an effort to take the sting out of the impasse. “Given the importance of a peaceful nuclear energy industry to South Korea,” he said, “we recently agreed to extend the existing civilian nuclear agreement between our two countries, but we also emphasized in our discussions the need to continue to work diligently towards a new agreement. As I told the president, I believe that we can find a way to support South Korea's energy and commercial needs, even as we uphold our mutual commitments to prevent nuclear proliferation.”
The complexities of the negotiations mirror the larger state of the alliance, encompassing not only specific economic and strategic differences but the very culture of the relationship. Particularly from the Korean perspective, the negotiations have tested whether Seoul will be treated as an equal partner.
123 Agreements are required of all countries securing nuclear technologies from the United States (the Arms Control Association offers a succinct overview of the basics). 123 agreements require a set of additional non-proliferation and safeguards commitments from signatories, going beyond the standard safeguards agreements that members of the Non-Proliferation Treaty (NPT) conclude with the International Atomic Energy Agency (IAEA). The full list of these measures is appended at the end of this post—taken directly from the Arms Control Association brief--but three have been the source of the dispute:
- U.S. consent is required for any re-transfer of material or classified data.
- Prior US consent rights are required for enrichment or reprocessing of nuclear material obtained or produced as a result of the agreement.
- Prior U.S. approval is required for highly-enriched uranium (HEU) and plutonium obtained or produced as a result of the agreement. An agreement permitting enrichment and reprocessing (ENR) using U.S. provided material requires separate negotiation.
The first of these constraints is seen by Seoul as affecting its autonomy and competitiveness in the growing global nuclear reactor market; Mark Holt at the Congressional Research Service has an excellent overview of the Korean industry(.pdf). Korea has trod a path in nuclear energy that parallels its development in so many other goods, starting with technology transfer, moving through indigenization, growing technological mastery and ending in exports. In December 2009, a South Korean consortium signed a $20 billion contract to provide four commercial nuclear reactors to the United Arab Emirates (UAE). However, complex technology licensing agreements still tether Korean exports to American firms such as Westinghouse that provided initial designs, and thus to a US approval process. South Korea would like a more “forward looking,” and presumably streamlined, process governing its potential sales.
Enrichment and reprocessing form the second and third points of contention, although the two issues are somewhat different. Like Japan, Korea has a waste storage problem: spent fuel rods are accumulating in cooling ponds near the countries’ 20 or so nuclear reactors. The ability to reprocess is being sought to kick this can down the road. The government and industry would cooperate on a waste storage solution by reprocessing spent fuel and using the plutonium generated to feed fast breeder reactors. If this sounds like the tail wagging the dog to you, it does to us as well; a similar “solution” in Japan has been stalled repeatedly despite expenditures of about $23 billion on a giant reprocessing plant in Aomori prefecture. Both the pyroprocessing technology that Korea wants to pursue as well as the fast breeder reactors remain relatively untested.
The enrichment issues circles back to Korea’s export ambitions. The government and private companies believe that the country’s competitiveness may be impaired by the inability to offer clients fuel in the form of enriched uranium.
Legally, the US has the power to grant exemptions from the prohibitions on enrichment and reprocessing, but its interest in doing so is highly variable to say the least; the administration has defended a "case by case" approach to such negotiations. On the one hand, it has signed agreements that contain exemptions—even blanket consent agreements--with Japan, Russia, India, and the European Atomic Energy Community (Euratom). The Indian case is particularly galling for South Korea as the country is not a member of the NPT; nonetheless, the Bush administration negotiated an agreement that ultimately required an exemption to the 123 process.
However, in most of these cases the US was bowing to the inevitable as these countries already had the capacities in question. At the other extreme, nonproliferation hawks are lauding a so-called “Gold Standard” agreement signed with the UAE in 2009. Under the agreement, the Emirates voluntarily renounced pursuing enrichment and reprocessing (ENR) technologies and capabilities altogether.
The United States is currently negotiating 123 agreements with Jordan, Saudi Arabia, and Vietnam. At some point, negotiations will take place with Taiwan. In these agreements, the US will clearly want the agreements to fall closer to the UAE than the Indian end of the exemption spectrum. US negotiators are concerned that a permissive agreement with Korea will result in similar demands down the line.
The issue of reprocessing and enrichment also has a peninsular dimension. Some have focused on the political fringe in South Korea that would like to acquire nuclear weapons, and noted that broader public opinion may be more supportive than is thought. But South Korea is not going nuclear any time soon; this concern is a red herring. The problems are more subtle, and have to do more directly with the North. Under the 1992 North-South denuclearization agreement, the two sides agreed that “the South and the North shall not possess nuclear reprocessing and uranium enrichment facilities.” Some in the South believe that the North-South agreement is a dead letter because the North has effectively and even officially abrogated it. Others believe that this requirement can be finessed via technicalities because pyroprocessing does not produce plutonium that would be immediately useful for nuclear weapons and fuel enrichment is not typically to bomb grade either.
But for the US, the North-South agreement is a precursor to the Agreed Framework and the September 2005 Joint Statement of the Six Party Talks and thus an element in American—and South Korean—denuclearization objectives. The North Koreans do not need an excuse to reprocess and enrich; they are doing both. But in future negotiations, could the North come back to the table and disingenuously make the future of its nuclear programs contingent on the termination of the South’s commercial ones? And is there any value to sticking to the high ground and keeping South Korea squeaky clean?
We confess to mixed feelings on the issue. Korean commercial interests may not align exactly with our strategic perceptions of non-proliferation risk and there is a logic to being conservative on the peninsula as well. The broader Asian scene is also unsettled; arguably we would be better off if Japan did not have these technologies either.
But we have a hard time getting as agitated as the nonproliferation hawks do. South Korea is now in complete compliance with its IAEA and 123 agreements, even if it has had a few moments of weakness in the past. We have extended these rights to allies who are no more (or less) reliable in Europe and Japan; Korea certainly deserves to be a member of this inner circle And we made a big exception for India. Nothing need be said about North Korea's willingness to abide by its agreements; catering to their sensibilities seems one of the weakest arguments at the table. It would even secretly give us pleasure to let the North—and China--contemplate a bit more closely the prospect of a nuclear South Korea even if it is highly unlikely to happen.
Moreover, there are clearly ways to structure the agreement to give South Korea more commercial latitude, in part because we can exercise control via our 123 agreements with Korea's customers. Squaring the circle on pyroprocessing and enrichment is more difficult; you are either doing it or you aren't. But Jack Spencer at Heritage has a good piece on how we might split the difference by seeking to accommodate our ally on pyroprocessing while holding the line on enrichment; we can imagine other variants. It is not just fringe South Korean politicians who are asking whether South Korea should be capable of making its own nuclear decisions and enjoying "nuclear sovereignty." or not. If not, why not exactly? That is a damn good question.
Others who have weighed in and are worth a look:
Victor Cha provides the big alliance picture for CSIS
Mark Hibbs at Arms Control Wonk on the South Korean politics.
Mark Hibbs again providing broader context for Carnegie
Jessica Varnum on the US policy debate
Duyeon Kim and Fred McGoldrick for the Korea Economic Institute
World Nuclear Association provides detail on the South Korean nuclear industry
The original 1974 agreement (.pdf)
The nine nonproliferation criteria for section 123 agreements are as follows:
- Nuclear material and equipment transferred to the country must remain under safeguards in perpetuity.
- Non-nuclear-weapon states partners must have full-scope IAEA safeguards, essentially covering all major nuclear facilities.
- A guarantee that transferred nuclear material, equipment, and technology will not have any role in nuclear weapons development or any other military purpose, except in the case of cooperation with nuclear-weapon states.
- In the event that a non-nuclear-weapon state partner detonates a nuclear device using nuclear material produced or violates an IAEA safeguards agreement, the United States has the right to demand the return of any transfers.
- U.S. consent is required for any re-transfer of material or classified data.
- Nuclear material transferred or produced as a result of the agreement is subject to adequate physical security.
- U.S. prior consent rights to the enrichment or reprocessing of nuclear material obtained or produced as a result of the agreement.
- Prior U.S. approval is required for highly-enriched uranium (HEU) and plutonium obtained or produced as a result of the agreement. An agreement permitting enrichment and reprocessing (ENR) using U.S. provided material requires separate negotiation.
- The above nonproliferation criteria apply to all nuclear material or nuclear facilities produced or constructed as a result of the agreement.
