USA signs 123 Agreement with UAE

16 January 2009

The United States has signed an agreement with the United Arab Emirates (UAE) for cooperation in the peaceful uses of nuclear energy.
The agreement, which would allow the transfer of nuclear energy-related materials and components between the two countries, was signed in Washington yesterday by US Secretary of State Condoleezza Rice and UAE Foreign Minister Abdullah bin Zayed al-Nayhan. The two countries completed negotiations on the text of a bilateral agreement in December 2008.
The agreement contains special terms under which the UAE has renounced plans to enrich and reprocess uranium or other fuel and will instead obtain nuclear fuel from reliable international suppliers. The USA will have the right to cancel the agreement if the UAE reneges on its commitment not to engage in enrichment or reprocessing activities.
In a statement, the US State Department said that "once it enters into force, the agreement will establish the legal framework for the United States to engage in civil nuclear cooperation with the UAE under agreed non-proliferation conditions and controls."
The department added, "The agreement will not only establish a firm foundation for mutually beneficial cooperation in civil nuclear energy, but also has the potential to usher in an era of responsible nuclear energy development throughout the Middle East." It continued that "this agreement can serve as a model for other countries in the region in pursuing responsible civil nuclear energy development undertaken in full conformity with non-proliferation commitments and obligations."
Before signing the agreement, Rice commented: "We're here to sign this as a tangible expression of the United States' desire for active cooperation with states in the Middle East and around the world to meet their energy needs in a manner that is consistent with the highest standards of safety, of security, and of non-proliferation."
She added, "As expressed in the agreement we are signing today, the UAE is choosing to pursue nuclear power via the import of nuclear fuel, rather than developing expensive and proliferation-sensitive fuel cycle technologies, such as uranium enrichment and reprocessing. This is a powerful and timely model for the world and the region, and we welcome the UAE's decision."
Abdullah said, "The UAE has been quite transparent about its peaceful, nuclear needs." He added, "We are a country that is very rich in its oil and gas, but we do look forward that we have a program, a nuclear, peaceful program that could sustain our future needs."


A "win-win" deal
The signing of the '123 Agreement' - so called because it is stipulated in Section 123 of the 1954 US Atomic Energy Act - with the UAE was welcomed by US business groups, including the US Chamber of Commerce. Danny Sebright of Chamber's US-UAE Business Council said, "This agreement creates an important model for the anticipated global renaissance in nuclear energy. Not only does it meet the highest standards of safety, security, non-proliferation and operational transparency, but it also creates a significant number of jobs for American companies."
The president of the National Association of Manufacturers, John Engler, commented, "This is a strong nuclear cooperation agreement and will provide the basis for US companies supplying equipment and services to the nuclear power industry to pursue large commercial opportunities in the UAE."
Bill Reinsch, president of the National Foreign Trade Council, called the agreement a "win-win" for both the USA and the UAE. He said, "For the UAE, the agreement will go a long way in helping the country to diversify its energy supply at a time when demand for energy is outpacing the availability of its current resources."
The UAE launched a nuclear energy policy in 2008 to help meet an energy demand forecast to double by 2020, by which time it hopes to have several nuclear power plants running. It has already signed a memorandum of understanding (MoU) on cooperation in peaceful uses of nuclear energy with the USA, but the 123 Agreement is a prerequisite for nuclear trade between the USA and another country.
The UAE, which is a member of the Gulf Cooperation Council, has signed cooperation agreements and memoranda of understanding with a number of countries and companies including the UK and France. In October, it appointed US-based C2HM Hill as managing agent for its nuclear power program. The UAE is reported to have invited expressions of interest from nine short-listed companies for construction of its first nuclear power plant.

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