August 3, 2012
By Chen Kane – A recent article by Mark Hibbs examining the implications of Taiwan renouncing enrichment and reprocessing under its proposed nuclear cooperation agreement (NCA) with the United States has sparked significant controversy.
I disagree with the premise of Mark’s article – that the UAE agreement was related to the gold standard in any way – but agree with his conclusion when he says “…others will have a different calculus, depending on what they want from the U.S., how important they think that is, and what domestic and foreign policy constraints they face.”
The most interesting question in my mind, however, is how such a Taiwanese renunciation agreement will influence future U.S. nuclear cooperation agreements involving countries in the Middle East.
First, allow me to clarify where I disagree with Mark on this topic. He writes that the Taiwan case is an unrealistic model for the gold standard because of the unique security arrangements the country has with the United States. Namely, “Taiwan’s resolve not to enrich or reprocess has nothing to do with the ‘gold standard’ and nearly everything to do with U.S. leverage over Taiwan’s security arrangements”, he says.
My point is that the UAE agreement (or for that matter, any other past or future agreement) is of course not about the gold standard per se. ANY nuclear cooperation agreement with the United States is about why the country needs or wants the U.S. blessing or cooperation for its nuclear energy program and what leverage the United States has over these countries. And as far as I know, the United States has leverage, be it military, political or economic, over many countries in the Middle East.
The UAE Example
Since much of the debate about the gold standard started following the UAE-U.S. nuclear cooperation agreement, it is important to have our facts straight. On April 20, 2008, the UAE released a comprehensive Policy White Paper about its program’s objectives and motivations. The policy document outlined the UAE’s intention to renounce developing domestic enrichment and reprocessing capabilities and to receive nuclear fuel from “reliable and responsible foreign suppliers.” The following day, the UAE government and the U.S. government concluded a memorandum of understanding (MOU) mentioning the UAE renunciation commitment. On January 15, 2009, U.S. Secretary of State Condoleezza Rice and UAE Foreign Minister Abdullah bin Zayed signed a nuclear cooperation agreement. However, reportedly, based on the UAE’s request, the agreement was not submitted to Congress. Burned by the Dubai Ports deal which did not receive Congressional approval, the UAE opted not to submit its NCA until it was confident U.S. Congress would approve it.
After taking office, the Obama administration sought to strengthen the nonproliferation provisions included in previous NCAs and negotiated a revised agreement with the UAE. The updated agreement explicitly prohibits the UAE from having enrichment and reprocessing activities and facilities within its territory.
On May 21, 2009, the UAE and the United States signed the agreement. In October 2009, the UAE adopted domestic legislation to permanently forgo the acquisition of uranium enrichment and plutonium reprocessing capabilities. In December 2009, the U.S.-UAE nuclear cooperation agreement came into effect, after being set before Congress for 90 continuous days.
The Gold Standard Debate
The United States has signed NCAs with more than 20 countries, and the text is usually fairly canned and standard. The precedent of the UAE agreement is that it includes three unique components. First, the UAE obligation not to acquire enrichment and reprocessing (dubbed ENR) technology on its territory. Second, a provision included in the “Agreed Minute” between the two countries stipulating that should the U.S. negotiate a NCA with another Middle East state under more favorable terms, the U.S.-UAE agreement can be renegotiated per UAE request. There is no obligation to renegotiate the agreement. Third, the agreement includes a requirement for the UAE to adopt the IAEA Additional Protocol to allow more intrusive IAEA inspections before the agreement can be implemented.
Because of its uniqueness, the UAE agreement has been referred to in the U.S. policy community as the “Gold Standard.” However, it also sparked a debate within the U.S. administration whether it could be established as the new minimum standard for future U.S. agreements in general, and in the Middle East in particular.
Those who oppose the inclusion of ENR renunciation in all future agreements caution that if the United States adopts a policy requiring ENR restrictions in every cooperation agreement, no future cooperation agreements can be concluded, resulting in the gradual death of the U.S. nuclear industry and the disappearance of important U.S. leverage on nuclear energy and nonproliferation policies. Those who support the inclusion of ENR restriction see it as part of a larger effort by the United States to prevent proliferation of sensitive technologies by forging renunciation of ENR as the new norm in nuclear commerce.
In January 2012, the Obama Administration announced that it had adopted a case-by-case approach to integrating nonproliferation objectives into future nuclear cooperation agreements. According to a letter sent by Ellen Tauscher, then U.S. Undersecretary of State for Arms Control and International Security, and Daniel Poneman, U.S. Deputy Energy Secretary, the approach noted that the U.S. will not require a commitment to forgo ENR in every future agreement. However, U.S. Secretary of State Hilary Clinton has reportedly recently ordered a reexamination of the case-by-case policy.
Future Middle Eastern 123 Agreements
The United States has concluded nuclear cooperation agreements with four countries in the region: Egypt (1981), Morocco (signed in 1980, and renewed in 2001), Turkey (2006) and the UAE (2009). The United States has been negotiating an NCA with Jordan and discussing the possibility of one with Saudi Arabia. In 2008, Bahrain, Jordan and Saudi Arabia signed MOUs with the United States that include similar commitments of refraining from ENR. However, MOUs are not legally binding and at least Jordan and Saudi Arabia have rejected the UAE formula since. Negotiations with Jordan have been frozen due to instability in the region, but it is projected that some kind of UAE-like restrictions would be adopted with Amman.
Regardless whether the Obama administration ultimately resolves its policy on ENR in future agreements, it is fair to say that an NCA with any country from the Middle East that does not include ENR restrictions would inevitably trigger serious bipartisan objections in Congress. Under Section 123 of the United States Atomic Energy Act of 1954, the Congress has the option to review any NCA for 90-days of continuous review and debate sessions. The House Foreign Relations Committee, which was active in demanding additional restrictions in the U.S.-UAE agreement, can be expected to make the same demands in other cases.
In fact, Congress considers legislation as a means to strengthen its role in approving NCAs. On April 14, 2011, the House Committee on Foreign Affairs unanimously approved H.R. 1280, a bill intended to close what the committee considered to be gaps in U.S. law related to bilateral NCAs. The bill would require an affirmative Congressional vote on an NCA unless the text includes commitments by the recipient country to forgo ENR, adopt the Additional Protocol and seek U.S. approval before allowing third-party nationals to gain access to U.S. nuclear exports. Notably, in 11 countries in the Middle East the Additional Protocol is not in force (Algeria, Egypt, Iran, Iraq, Israel, Lebanon, Qatar, Saudi Arabia, Syria, Tunisia and Yemen). By contrast, the bill requires those NCAs that do not contain the restrictions to win a vote in Congress in their favor, making it easier for opponents to stall or defeat them.
In light of the mounting obstacles to close a NCA with the United States, some Middle Eastern countries may conclude that there is no real need for such an agreement, since they do not plan to import U.S. nuclear reactors. However, the following could alter this calculation. Under new regulation proposed by the U.S. Department of Energy in November 2011, reactor vendors whose reactors are based on U.S.-origin technology would need to obtain U.S. approval before selling them to any state that did not have an NCA with the United States. Of the five vendors of light water reactors (Japan, France, U.S, South Korea and Russia), most designs by the first four countries are based on U.S.-origin technology. Under this legislation, if adopted, the United States could veto any sale to a country that has not concluded an NCA with the U.S. As mentioned before, so far only Egypt, Turkey, Morocco and the UAE have done so.
In conclusion, any country embarking on a nuclear energy program does it for various strategic reasons. Its decision whether to conclude a nuclear cooperation agreement with the United States is driven by its need or a desire to get U.S. blessing for its program and hope to gain access to U.S. technology. The terms of a specific agreement are driven by the leverage the United States has over a particular country. It will be harder for any country, especially from the Middle East, to conclude an agreement without ENR renunciation if the United States managed to gain agreement from both the UAE and Taiwan, especially because of the more favorable term in the UAE agreement. However, a decision not to conclude such an agreement with the United States may mean it will not be able to buy a reactor from most rectors suppliers.