Brian Bradley
NS&D Monitor
7/17/2015
Ending the U.S. civil nuclear agreement with China would diminish Washington’s visibility into Beijing’s questionable nonproliferation practices, and could tempt other countries to fill the void created by the departure of American companies, two senior State Department officials told House lawmakers yesterday. France, Russia, Japan, and South Korea could capitalize on any future American absence from the booming Chinese civil nuclear industry, Thomas Countryman, State Department Assistant Secretary of International Security and Nonproliferation, said during a joint hearing of the House Foreign Affairs subcommittees on Asia and the Pacific, and Terrorism, Nonproliferation, and Trade. “There are other countries that are eager to sell nuclear power plants to China,” he said. Frank Klotz, Administrator of the National Nuclear Security Administration, concurred, saying the agreement will have global implications on nonproliferation and commerce. Experts have said China is poised to become the biggest national civil nuclear market in the next few decades.
Would Next Agreement Improve Upon Current One?
The current 30-year agreement, signed in 1985, will expire at the end of this year unless it is renewed. While Countryman emphasized that the draft of the renewed accord, submitted to Congress in April, improves upon the original agreement “in all respects,” Rep. Matt Salmon (R-Ariz.), Chairman of the Asia and the Pacific Subcommittee, raised concern about language that would “streamline” licensing for technology transfers outside the U.S. “I just have a concern that, given [China’s] likely violation of their pledge not to divert U.S. civilian technology for military purposes under the existing 123 [agreement], maybe we should be tightening the tech transfer authorizations rather than streamlining them,” he said. Klotz said the Obama administration updated this licensing process—known as an “810” Authorization for its numbering in the Code of Federal Regulations—after Congress and the Government Accountability Office called for a more transparent and efficient application procedure. Klotz said the process will be tailored to the 123 agreement framework.
“One of the issues that has been a problem in slowing down that process has been the need for approval of each application, the requirement for the Department of State to go to whatever country that we are considering a 123 agreement with, to get our nonproliferation assurances,” Klotz said. “What this particular agreement does is to wrap those nonproliferation assurances into the 123 agreement. In effect, it escalates it from the 810 process into the 123 process, so the nonproliferation assurances are moved to that level of the state-to-state agreement. So with that we will still go through the very rigorous, robust vetting of each and every 810 application through the interagency process, which … includes all of the national security agencies, as well as the Department of Commerce and the Nuclear Regulatory Commission.”
Rep. Brad Sherman (D-Calif.), Ranking Member of the Asia and the Pacific Subcommittee, told NS&D Monitor after the hearing that he hopes the U.S. job market could reap benefits from renewing the agreement. “The unions see this as a shot for jobs,” Sherman said. “My concern is that the easiest way to make a profit is to just license technology and not build anything in the United States, and so I’d like to see this crafted in a way where we really do see jobs, and not just a technology license.”
How Much Money Does U.S. Industry Stand to Gain?
U.S. industry has earned about $8 billion in sales under the current agreement. As China plans to grow its reactor base from 27 to 51 plants, U.S. companies have another $30 billion-$60 billion “under current negotiation,” and could earn several billion dollars during each year of the renewed three-decade agreement, said Daniel Lipman, Vice President of Supplier and International Programs for the Nuclear Energy Institute.
But some Congress members remain concerned about reports indicating China has diverted civil nuclear technology for military uses, including converting Westinghouse’s AP1000 reactor for submarines’ canned coolant pump technology, which contributes to the vessels’ stealth. Henry Sokolski, Executive Director of the Nonproliferation Policy Education Center, testified during the hearing that the existing agreement gives “blanket advance consent” to China to extract weapons-usable plutonium from U.S.-designed reactors and reprocess the spent fuel, which could cause “potentially enormous” regional security implications.
Processing Concerns
But Countryman told reporters on the sidelines of the hearing that China has “long known” how to reprocess nuclear waste into plutonium, a fact that provisions of a 123 agreement are unlikely to change. “They don’t need U.S. technology to do that,” he said. The agreement allows China to extract plutonium from U.S.-made reactors, within the confines of subsequent administrative arrangements, Countryman said. “It’s not a blank check,” he said. “It is an agreement in principle that they can continue to do what they already know how to do.”
U.S. lawmakers have recently criticized China for selling nuclear technology to Pakistan and Iran. Countryman said the U.S. remains unsatisfied with China’s level of commitment to nonproliferation, but added that this agreement gives Washington a window into Beijing’s behavior through governmental and corporate engagement. Countryman said China’s nonproliferation record has improved since 1985, including the nation becoming party to the Nuclear Nonproliferation Treaty in 1992 and joining the Nuclear Suppliers Group in 2004, and he touted the agreement’s role in helping that nation to better embrace international nonproliferation norms. “What we’re urging them to do is to devote a fraction of the resources, money, and personnel that they devote to managing a big nuclear program to managing an export control program,” Countryman said during the hearing. “We believe that they can do that.”
Countryman told reporters after the hearing that the agreement is vital to maintain American influence in China. “If we have no nuclear commerce with China, if there is no nuclear technology that goes there, perhaps we have less concern because there’s no U.S. nuclear technology, but we also have less influence, less capability to get them to move to stronger standards of nuclear safety, nuclear security and export control,” he said.
