Bush drops 123 Agreement with Russia

09 September 2008

An earlier version of this story incorrectly stated that the 123 Agreement was required for the movement of Russian uranium products to the USA under the revised terms of the Suspension Agreement. This error is corrected below.


American leaders have put a nuclear cooperation agreement with Russia on hold, directly linking the move to the recent troubles concerning Georgia and South Ossetia.


US/Russia flagsThe deal, known as a 123 Agreement after the section of the US Atomic Energy Act which requires it before nuclear trade can take place, had been signed in May by Sergei Kiriyenko and William Burns for the Rosatom agency and the US diplomatic mission to Russia respectively. The signing was accelerated because Kiriyenko was about to leave his post to take charge of the Rosatom corporation and Russian President Vladimir Putin was about to leave office. Its exact text was never revealed, with observers concluding that it must still have been in draft stages.


US President George Bush officially transmitted a proposed text for the agreement to the US Congress later that month, where it remained until now. Yesterday Bush said that submission had been cancelled with the words: "In view of the recent actions by the government of the Russian Federation incompatible with peaceful relations with its sovereign and democratic neighbour Georgia, I have determined that the determination regarding the proposed agreements... is no longer effective."


The move has come just one working day after the US-led initiative to bring India into the mainstream of nuclear trade was successful. Russia could have blocked that last weekend at the Nuclear Suppliers Group meeting, where decisions have to be unanimous. The Russian foreign ministry said it was 'perplexed' by the timing of the 'regrettable' American move.


With no ratification by Congress, no nuclear cooperation can take place beyond existing agreements. Being used as political pawns will be a disappointment to commercial nuclear technology, power and fuel companies in both countries - both sides have high technology, specialist skills and materials which would gain places in each other's markets. However, Cheryl Moss Herman of Ux Consulting told World Nuclear News that problems with the 123 Agreement would not affect the quotas of Russian uranium products allowed entry to US markets under the terms of the revised 'Suspension Agreement'. These are due to begin in 2011, timed to help replace the secondary supply lost at the end of the 'Megatons to Megawatts' program of downblending Russian warheads.


US secretary of state Condoleezza Rice issued a statement on the matter, saying "the time is not right for this agreement" although "The US non-proliferation goals contained in the proposed agreement remain valid: to provide a sound basis for US-Russian civil nuclear cooperation, create commercial opportunities and enhance cooperation with Russia on important global non-proliferation issues."


The nuclear cooperation deal was one part of a wider strategic framework agreed by Bush and Putin but now seems likely to be postponed for the remainder of Bush's term in office. The agreement text would then have to be resurrected by a new determination and resubmission by the next US President.


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