Share This

State Dept. Official: 123 Agreement Vital for South Korea Nuclear Trade

July 3, 2013—As negotiations continue on a bilateral nuclear trade agreement with South Korea, a State Department representative said on Capitol Hill that the agreement could increase exports and benefit national security.

Thomas Countryman, assistant secretary of state for international security and nonproliferation, said that so-called 123 trade agreements, named after a provision in the Atomic Energy Act of 1954, can help prevent the spread of sensitive technologies.

“One of the tools we use … is the nuclear cooperation 123 agreement, by which the United States not only establishes its presence in international markets, but also is able to exert a benign influence upon states in order to further discourage the spread of enrichment and reprocessing technology,” Countryman said.

Legislation is needed to extend the existing 123 agreement with South Korea while a long-term successor agreement is being negotiated. Countryman, speaking at a joint subcommittee hearing of the House Committee on Foreign Affairs, noted there are 123 agreements with 24 other countries in place.

South Korea is a key trade partner in nuclear goods and technologies, Countryman added.

“From 2001 to 2010, U.S. nuclear industry exports to the Republic of Korea totaled $181 million,” Countryman said.

U.S. exports to South Korea include mechanical components, instrumentation and control systems, nuclear fuel, and fuel services for 19 of the 23 Korean reactors that are based on U.S. technology and nine reactors under construction, on order or planned. South Korean companies, meanwhile, are supplying critical equipment, including reactor vessels, steam generators, condensers and other components for the Westinghouse AP1000 projects at Vogtle and V.C. Summer in the United States and at Haiyang and Sanmen in China (see Nuclear Energy Overview, May 9).

Countryman continued, “Another example … is the contract between South Korea and the United Arab Emirates for nuclear reactors. Westinghouse and other U.S. companies will carry out about 10 percent of the work associated with this project, amounting to about $2 billion in equipment and services and about 5,000 American jobs across 17 states.”

Countryman attributed the statistics he was citing to NEI, which he called “an industry organization [that] we respect.”

Congressional representatives also voiced their support for extending the South Korea 123 pact.

“I fully support the two-year extension that has been agreed to in principle by the negotiators,” said Rep. Adam Kinzinger (R-Ill.). “Substantial progress has been made, but more time is needed to complete a new agreement that recognizes both our countries’ status as global leaders in nuclear energy.”

Rep. Ted Poe (R-Texas) said a longer-term 123 agreement between the two countries, instead of a two-year extension, would be preferable.

“I do support extending this agreement because it will prevent thousands American from losing their jobs … but we can’t just keep extending agreements indefinitely,” said Poe. “Our business community needs certainty.”

Countryman said he is optimistic that a two-year extension of the agreement would be in place by 2014, when the current agreement expires.

“Renewing it on time will prevent any interruption in our commercial cooperation,” Countryman said. “I am confident that we will not reach [an interruption] … because of the joint determination of both countries to get a good agreement done.”

In the closing minutes of the hearing, Countryman urged lawmakers to foster commercial nuclear exports in an increasingly competitive world.

“[The 123 agreement] gives a very competitive American industry the ticket to go in and to persuade other countries … of the important safety and economic benefits of U.S-supplied equipment. It has enabled us to compete successfully around the world in a variety of countries,” Countryman said. “That said, the world is more and more competitive in this field. The United States has to do more in order to maintain its competitiveness with other countries and we’re committed to doing that.”

Nuclear Energy Overview