US business in joint plea on nuclear trade

23 July 2013

Three US business associations have directly asked the US administration to adopt a more assertive approach to fostering international nuclear trade, urging expedited conclusion of bilateral cooperation agreements and a "pragmatic" approach to uranium enrichment and reprocessing.

In a letter sent to Secretary of State John Kerry and Energy Secretary Ernest Moniz, the three organizations - the Nuclear Energy Institute, the National Association of Manufacturers, and the US Chamber of Commerce - express concern that as well as losing out on business opportunities, the USA is also at increasing risk of losing its influence on nuclear safety, security and non-proliferation on the global stage.

The nub of the issue is the requirement for bilateral cooperation agreements for trade between the USA and other nations under Section 123 of the US Atomic Energy Act of 1954 - known as 123 agreements. To date, the USA has entered into 24 such agreements covering some 50 countries. However, the organizations are concerned that in today's highly competitive global market, US rigidity on the right to enrich or reprocess uranium presents a potential barrier to the timely conclusion of agreements that are still under negotiation.

Noting that the US is no longer the "dominant supplier" to the global nuclear market that it was when the 1954 legislation was drawn up, the organizations urge the US administration to adopt a "pragmatic" approach to enrichment and reprocessing, which does not require prospective partners to forswear use of these technologies as a condition of cooperation. "Unyielding and inflexible insistence on such conditions threatens the ability of the United States to engage in nuclear cooperation with countries embarking on civil nuclear programs," the letter states.

The US has been involved in negotiations with countries keen to move forward with their nuclear programs, such as Jordan, Vietnam and Saudi Arabia, but its failure to conclude 123 agreements in a timely manner has seen those countries looking to develop their civil nuclear programs in partnership with other countries. With no such requirements for cooperation agreements, nuclear suppliers from countries such as France, Japan, Russia and South Korea are able to offer international customers a competitive range of products and services. Meanwhile, "US firms have been left out," according to the organizations.

The letter also points to the USA's inability to conclude a long-term successor to its 123 agreement with South Korea. South Korea wishes to centralise the storage of its accumulating inventory of used nuclear fuel and to reprocess it to recover recyclable materials, and has also expressed interest in being able to enrich uranium for fuel use domestically. These issues have created a stumbling block to renegotiations of the existing but soon-to-expire agreement. A two-year extension to the existing agreement was announced earlier this year, but provides "only a short reprieve," according to the US organizations. "Given the nuclear energy industry’s requirements for long-lead items and use of long-term contracts for nuclear fuel and services, timely renewal of these agreements is critical to maintaining the credibility of the United States as a reliable supplier and partner," they say.

Researched and written
by World Nuclear News