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Tuesday, August 23, 2011

Nuclear Energy Cooperation with Foreign Countries: Issues for Congress

Paul K. Kerr
Analyst in Nonproliferation

Mark Holt
Specialist in Energy Policy

Mary Beth Nikitin
Specialist in Nonproliferation

U.S. civil nuclear cooperation agreements (“123” agreements), which are bilateral agreements with other governments or multilateral organizations, have several important goals, including promoting the U.S. nuclear industry, which is increasingly dependent on foreign customers and suppliers, and preventing nuclear proliferation. Increased international interest in nuclear power has generated concern that additional countries may obtain fuel-making technology that could also be used to produce fissile material for nuclear weapons. Ensuring the peaceful use of transferred nuclear technology has long been a major U.S. objective, and Congress has played a key role. For example, the Nuclear Nonproliferation Act of 1978, which amended the Atomic Energy Act (AEA) of 1954, added new requirements for nuclear cooperation with the United States. Moreover, the United States has been a longtime proponent of restrictive international nuclear export policies.

In recent years, some observers and Members of Congress have advocated that the United States adopt new conditions for civil nuclear cooperation. These would include requiring potential recipients of U.S. civil nuclear technology to forgo fuel-making enrichment and reprocessing technologies and to bring into force an Additional Protocol to their International Atomic Energy Agency (IAEA) safeguards agreements. Such protocols augment the IAEA’s legal authority to inspect nuclear facilities.

Civil nuclear commerce, particularly reactor transfers, may not be a near-term proliferation threat: all but three states (India, Israel, and Pakistan, all of which have nuclear weapons) are parties to the nuclear Nonproliferation Treaty (NPT); all legitimate transfers of nuclear technology to NPT non-nuclear-weapon states are subject to IAEA safeguards; and no country with comprehensive safeguards in place and a record in good standing with the IAEA has used declared nuclear facilities to produce fissile material for weapons. Further, the international community has multiple mechanisms to dissuade countries from developing domestic enrichment or reprocessing facilities. States such as India, Iran, Israel, North Korea, and Pakistan did acquire enrichment or reprocessing technology, but did so either clandestinely or prior to the establishment of the Nuclear Suppliers Group (NSG) in the mid-1970s.

Key factors and issues for Congress: 

  • The United States concludes nuclear cooperation agreements for a variety of reasons, including promoting nonproliferation, supporting the U.S. nuclear industry, and improving or sustaining overall bilateral and strategic relations. (See “Policy Goals of U.S. Nuclear Cooperation Agreements.”) 
  • The U.S. nuclear industry’s market share has declined in recent years; foreign customers and suppliers are important to the industry’s viability. Some argue that the absence of U.S. government liability protections for the U.S. nuclear industry puts that industry at a disadvantage relative to foreign competitors who enjoy such protections. (See “U.S. Nuclear Industry” and “Liability.”) 
  • Fears of additional states obtaining enrichment or reprocessing technologies may not materialize. Neither the United States nor any other states possessing enrichment or reprocessing technology have plans to transfer any such technologies. Moreover, the market for nuclear fuel currently functions well and the international community has begun to implement mechanisms to support the market. Although countries have the right under the NPT to develop their own nuclear fuel production capabilities, a functioning nuclear fuel market should reduce the need for them do so. Nevertheless, as noted, states have previously managed to acquire these technologies. (See “Enrichment and Reprocessing Worldwide.”) 
  • The number of NPT states-parties that have signed Additional Protocols has been steadily increasing; most states with significant nuclear activities have signed such protocols, giving the IAEA greater inspection authority over civil nuclear programs. (See “The NPT and IAEA Safeguards.”) 
  • Some argue that the United States should use its influence to persuade other countries to adopt additional constraints on nuclear transfers. However, the relative decline of the U.S. nuclear industry, as well as some key states’ demonstrated lack of willingness to accept such constraints, suggests that U.S. influence in this area is limited. (See “Additional Issues for Consideration.”) 
This report discusses broad themes related to U.S. nuclear cooperation with other countries. More details of specific legislative proposals from the 112th Congress are found in CRS Report RS22937, Nuclear Cooperation with Other Countries: A Primer, by Paul K. Kerr and Mary Beth Nikitin.

Date of Report: August 10, 2011
Number of Pages: 36
Order Number: R41910
Price: $29.95

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