U.S., Vietnam Pursuing 123 Agreement

Aug 5, 2010

By Sarah Bulley

The United States and Vietnam are in the “advanced stages” of a nuclear technology exchange, the Wall Street Journal reports today. The deal would transfer nuclear technology and fuel to Vietnam, as well as allow for domestic uranium enrichment. Although some experts believe this will take a step back from the President’s nonproliferation efforts, the Administration believes that different countries require different policies.

Since first signing a memorandum of understanding in March, the United States has pursued “accelerated talks” with Vietnam. According to an unnamed U.S. official interviewed by the Wall Street Journal, the new “123 Agreement” with Vietnam would allow for the U.S. firms, such as General Electric and Bechtel to export nuclear reactors and other components to Vietnam. All facilities would be under the strict supervision of the IAEA and in compliance with Vietnam’s safeguards obligations.

"If we're able to have U.S. companies and technologies in play in Vietnam this gives the ability to exert some leverage," said the U.S. official briefed on the negotiations. "If we shut ourselves out, others may have different standards."

If the deal were to be finalized, there would be several implications for U.S. nuclear and nonproliferation policy. Last year, the Obama administration completed a deal with the UAE whereby the United States agreed to export nuclear reactors and other technology and the United Arab Emirates promised not to enrich its own uranium, but obtain nuclear fuel on the international market. According to an official quoted in the Journal, the standards required by the U.S. for Middle East nuclear partners and Asian allies will expose a double standard

This could cause Jordan, Saudi Arabia and other nations currently pursuing cooperation agreements with Washington to balk at accepting the same tough terms as the U.A.E.

"It's ironic...as nonproliferation is one of the president's top goals that the U.A.E. model is not being endorsed here," said a senior Arab official whose government is pursuing nuclear power. "People will start to see a double standard, and it will be a difficult policy to defend in the future."

The United States is currently in the process of negotiating a similar deal with Jordan. However, Jordan has indicated that it would like to enrich uranium domestically, a right it is guaranteed under the Nonproliferation Treaty. The official interviewed by the journal said that each “123 Agreement” is a unique case, and the deal reached with the UAE is not necessarily the shape of all nuclear agreements

"Given our special concerns about Iran and the genuine threat of a nuclear arms race in the Middle East, we believe the U.A.E....agreement is a model for the region," said the U.S. official. "These same concerns do not specifically apply in Asia. We will take different approaches region by region and country by country.

South Korea also has a bilateral nuclear trade agreement with the United States, set to expire in 2014. The agreement does not allow for South Korea to enrich or reprocess its nuclear fuel, but South Korea hopes to amend that fact when the agreement is renegotiated, beginning this fall. If Vietnam retains the ability to enrich under a U.S. agreement, South Korea can hope to make a stronger case for reprocessing spent nuclear fuel when it meets with negotiators over the coming months.

According to the government official quoted in the Journal article, China was not involved in the agreement

U.S. officials this week said they haven't been briefing Beijing, or seeking its approval, while conducting the nuclear talks with Vietnam. "This is a negotiation between the U.S. and Vietnam," said the senior U.S. official. "We don't ask China to approve issues that are in our own strategic interest."

In fact, Vietnam recently signed a memorandum of understanding with China “boost cooperation on nuclear power projects between the two countries.” The agreement allows Vietnam to trade in nuclear technology with the Guangdong Nuclear Power Group, a state-owned atomic energy firm. Vietnam and China have had a nuclear cooperation agreement in place since 2000, and Vietnam’s budding nuclear energy program has been developed with primarily Chinese and Russian assistance.

The Vietnamese nuclear official said that although the draft U.S. agreement allows for Vietnam to enrich its own nuclear fuel, Hanoi has no plans to do so. It would put Vietnam in a precarious situation, he said. As the Wall Street Journal reported

Vuong Huu Tan, director of the Vietnam Atomic Energy Institute, a government office, said Vietnamese and U.S. officials reached an initial agreement on nuclear cooperation in March and hope to finalize the pact later this year. He said Vietnam didn't plan to enrich uranium, "as it is sensitive to Vietnam to do so."

One can only assume that enriching uranium would cause regional tensions. In addition to China, which provides Hanoi with nuclear assistance, the increased attention paid to Burma’s nuclear ambitions could cast additional attention on Vietnam if it chose to enrich domestically. However, if Vietnam does not plan to enrich uranium, why does the draft agreement purportedly include provisions that allow Hanoi to do so?

A nuclear agreement with Vietnam is a sign of both warmer relations decades after the Vietnam War and the U.S. desire to seek a stronger presence in East and Southeast Asia. The real winner in all of this, however, seems to be Vietnam. A recently inked nuclear cooperation agreement with China and a nearly completed deal with the United States will make for a robust domestic nuclear energy program. As to the implications for other “123 Agreements”, the coming months will demonstrate whether or not the Obama administration adopts a “country by country” approach to nuclear trade agreements.

//Nguyễn Thanh Quang under a Creative Commons License