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ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries Fred F. McGoldrick • Robert J. Einhorn • Duyeon Kim • James L. Tyson Arms Control and Non-Proliferation Initiative ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries January 2015 at BROOKINGS The Brookings Institution | Arms Control and Non-Proliferation Initiative 01 acknowledgments I would like to express my deep gratitude to Fred I also greatly appreciate the assistance of Alfred McGoldrick, the principal drafter of this report Imhoff, as well as Gail Chalef and her colleagues and my former colleague at the State Department, at Brookings, in the editing and production of the for his vast personal experience in U.S. nuclear report. export control and nonproliferation policies and painstaking research on current global nuclear en- Not least, I would like to thank the Korea Ad- ergy markets that provide the critical foundation vanced Institute of Science and Technology for its for this study. I would also like to thank Duyeon generous support for this study. Kim for her assistance in structuring the project, conducting research on South Korean government and nuclear industry policies and practices, and Robert Einhorn providing valuable comments on drafts of the re- Brookings port, as well as Brookings research assistant James Tyson for his strong support in the production of the report. Brookings recognizes that the value it provides to any supporter is in its absolute commitment to quality, independence, and impact. Activities supported by its donors reflect this commitment, and the analysis and recommendations of the Institution’s scholars are not determined by any donation. ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries The Brookings Institution | Arms Control and Non-Proliferation Initiative i contents chapter 1 Introduction.............................................................1 chapter 2 U.S. Legal and Policy Requirements for Nuclear Collaboration..................4 chapter 3 Comparison of the United States’ and Other Major Suppliers’ Nuclear Export Controls: Their Impact on U.S. Competitiveness ......................16 chapter 4 Potential Markets for South Korean Nuclear Exports . .28 chapter 5 Potential Cooperation between the United States and South Korea in the Global Nuclear Market: Comparative Advantages and Disadvantages ...........41 chapter 6 Potential Role of the U.S. Government in Facilitating U.S.-ROK Nuclear Collaboration in Third Countries ..........................................56 chapter 7 ROK-U.S. Cooperation in Advancing Nuclear Nonproliferation, Security, and Safety Objectives ....................................................66 chapter 8 Summary and Conclusions ...............................................87 Endnotes. .......................................................................99 About the Contributors ............................................................116 ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries The Brookings Institution | Arms Control and Non-Proliferation Initiative ii chapter 1 Introduction he United States and the Republic of Korea nonproliferation standards. The conclusion of a (ROK) have enjoyed a lengthy and fruit- new ROK-U.S. civil nuclear cooperation agree- ful bilateral cooperative relationship in the ment, which is expected soon, should help en- Tpeaceful uses of nuclear energy and in promot- hance nuclear commerce and intergovernmental ing mutual nuclear nonproliferation objectives. collaboration between the two countries, and pro- The United States has long been a major exporter mote the development of partnerships between of nuclear materials, equipment, and technology. their industries in third markets. South Korea has recently entered the international nuclear market—for example, it has sold nuclear The United States’ nuclear exports to the ROK as reactors to the United Arab Emirates (UAE)—and well as U.S. cooperation with South Korea in the in- is positioning itself to become a leading supplier of ternational market are governed by the U.S. nucle- nuclear reactors, components, and services to oth- ar export control system. U.S. nuclear cooperation er countries. The nuclear industries of both coun- with other countries is subject to a range of laws, tries are already closely intertwined. regulations, and policies that are administered by various agencies of the U.S. government. This nu- The projected growth in the use of nuclear power clear export control system applies to direct U.S. worldwide creates new opportunities for deepen- nuclear exports to South Korea; to the retransfer ing and expanding existing U.S.-ROK collabora- from South Korea of U.S.-origin nuclear materials, tion to promote the civil uses of nuclear energy in equipment, components, and technology to third third countries.1 This expansion can build on the countries; and to joint cooperation between U.S. cooperation that is already taking place. For ex- and South Korean companies in the international ample, American companies are participating in market. the South Korean-led nuclear project in the UAE, and South Korean firms are significant suppliers U.S. legal instruments for nuclear trade with coop- to Westinghouse AP1000 reactors that are un- erating partners as well as the specific nonprolifer- der construction in China. The governments and ation assurances and controls required for partic- nuclear industries of both the U.S. and the ROK ular exports vary, depending on the sensitivity of also have a strong mutual interest in ensuring that the material, equipment, or technology involved. their cooperation in transferring nuclear mate- In addition, U.S. law specifies the particular stan- rials, equipment, and technology to third coun- dards and criteria that must be met before various tries is subject to the strictest safety, security, and kinds of cooperation may be authorized. ROK-U.S. Civil Nuclear and Nonproliferation Collaboration in Third Countries The Brookings Institution | Arms Control and Non-Proliferation Initiative 1 This report attempts to answer a number of ques- • What steps could the U.S. government take tions, including the following: to facilitate the two countries’ collaboration in the international nuclear market? • What are the U.S. legal, regulatory, proce- dural, and policy requirements and criteria • What cooperative steps could the govern- for collaboration with South Korea involv- ments and companies of the ROK and the ing (1) direct exports from the U.S. to third U.S. take to ensure the establishment of the countries; and (2) reexports by the ROK to highest standards of nuclear nonprolifera- third countries of U.S.-origin nuclear mate- tion, security, and safety in countries ben- rials, facilities, components, and technology, efiting from U.S.-South Korean nuclear col- as well as dual-use items? laboration? • What kind of U.S. nuclear exports, or reex- The remainder of this report is organized as fol- ports from South Korea, to a third country lows: would require that a U.S. peaceful nuclear cooperation agreement (sometimes called a Chapter 2 identifies the legal, regulatory, and 123 agreement) be in effect with that third policy requirements that are necessary to enable country?2 South Korean and American nuclear industries to • What kinds of nuclear items may be export- cooperate in exporting U.S.-origin nuclear equip- ed or retransferred without a peaceful nu- ment, components, fuel, technology, and services clear cooperation agreement? to third countries. Collaboration between South Korean and U.S. companies may take many forms, • When a peaceful nuclear cooperation agree- including: ment is not required, what kinds of legal in- struments and nonproliferation assurances • Direct physical exports of nuclear materi- would the U.S. require of the third county? als, equipment, and components from the Of South Korea? United States to South Korea or to a third country; • How do the United States’ nuclear export re- quirements differ from those of other major • The reexport of such U.S.-supplied items by nuclear suppliers? To what extent will dis- the ROK to a third country; parities in requirements between the U.S. • The transfer of nuclear technology from U.S. and other suppliers affect competitiveness companies to South Korea or the retransfer in the global nuclear marketplace and the of such technology by the ROK to a third prospects for U.S.-ROK collaboration in country, which could involve such transac- third countries? tions as the provision of design information, • In what countries is South Korea seeking to person-to-person contacts, and consulting promote its nuclear exports, and what are arrangements. the prospects for such exports? Because current South Korean power plants are • What are the prospects for U.S.-ROK collab- largely derived from U.S.-origin technology, the oration in third-country markets, given the United States is in a position to approve the con- relative strengths and weaknesses of their ditions under which South Korean reactors and respective industries, while bearing in mind related technology are exported to third countries. that American and South Korean companies This chapter examines the range of U.S. laws, reg- may sometimes be in direct competition for ulations, and policies that apply to direct U.S. nu- nuclear projects in third countries? clear exports as well as reexports. In addition, it ROK-U.S. Civil Nuclear and Nonproliferation Collaboration
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