A History of Folly:
A History of Folly: How the India and UAE Nuclear Deals Make the Case for a Greater Public-Private Partnership in Nuclear Security Bradford Simmons
Agenda • Reflections on the U.S.-India Civil Nuclear Trade Agreement • U.S.-UAE 123 Agreement, subsequent failed tender proposal, and civil nuclear trade legacy • Evidence of a dysfunctional public-private relationship in nuclear security and its effects on U.S. foreign policy and security posture • Proposals for greater public-private collaboration in nuclear security
U.S.-India Civil Nuclear Agreement • Macro Effects • Brought India from international marginalization to accepted nuclear power • Provided access to international nuclear technologies and fuel • Potential ascension to international organizations
• U.S. Objectives • Foster new era of strategic engagement • Develop new commercial relationship with billions in potential nuclear export content • Eliminate the most contentious outstanding impediment to a fully functional relationship of strategic allies • Empower democracy regionally by strengthening ties • Bring India into the nonproliferation fold
Results? • U.S. companies have not begun construction on a single nuclear unit in India • No restraint by India on issues on nuclear proliferation • An unreliable and, at times, frustrating regional partner • Ill-timed Agni-V launch • Reluctance to cut Iranian petroleum imports • Circumvention of financial transaction sanctions on Iran
• Seemingly insurmountable regulatory hurdles on the issue of nuclear liability
Timeline of the UAE Nuclear Deal January 2009: U.S. and UAE sign agreement on nuclear cooperation and sign 123 Agreement
December 2006: Gulf Cooperation Council Meets to discuss the peaceful pursuit of nuclear power
March 2010: KEPCO awards construction contracts to Hyudai and Samsung worth $5.59 billion
April 2008: UAE Publication of the Peaceful Use of Nuclear Energy
2007
2006
March 2007: At the urging of U.S. and in expectation of a nuclear technology transfer, UAE passes first domestic export control law
2008
2009
UAE begins to sign MOUs with potential technology providers
2010
December 2009: Shortly after an official visit by President Lee, ENEC announces the KEPCO consortium as the winning bid
January: UAE-France MOU
2006: US transfers $1.66 billion in military hardware to UAE April: UAE-U.S. MOU
May: UAE-UK MOU
Mid-2009: UAE reduces list of suitors from 9 to 3 and accepts bids from Areva, KEPCO, and GE Hitachi
2011
December 2011: UAE and South Korea sign an MOU arranging the transfer of nuclear information, research, education and training
2012 Mid-2012: Construction on UAE’s first nuclear plant slated to begin
Costs of the UAE Deal • Reconstitution of debate on the goals of 123 Agreements • Misbranding, the ‘gold standard’, and the disconnect between security and commercial camps • Revitalization of Congressional involvement and role • HR 1280 • Politicization of nuclear security
• Uncertainty surrounding future negotiations puts U.S. exports at further disadvantage • Void will be filled by nuclear exporters with less stringent trade agreement requirements • How much of a role the U.S. will play is a matter of our own determination
Need for a Public-Private Relationship • India Deal • Unrealistic private sector expectations • Ceded an influential source of bilateral leverage without due compensation and tangible benefits • Strategic and commercial goals left unrealized
• Failure to duly evaluate potential sources of gridlock • Bhopal Legacy
• UAE Deal • Political pursuit of nuclear agreement not matched with a viable commercial offer • Offer of commercially unproven Gen III technology
• Enormous investment of diplomatic capital unmatched by the private sector with reverberating consequences
Path Forward, Policy Recommendations • I. Broad-ranging collaboration building • Create a platform for public-private collaboration • Establish a USG-Industry steering committee
• The private sector must be afforded the opportunity to offer its unique insight to public stakeholders • Shed Cold War era mentalities of security
• II. Use collaboration to prioritize and structure • Closer ties to foster realistic expectations of market opportunity (India) • Use private sector consultation to determine and pursue the most pressing nuclear trade and security agreements (UAE)
• III. Increase private sector capacity • Lack of privatized fuel cycle options • Government has a role to play in identifying structures and to lead the team USA approach
Questions or Comments? Bradford Simmons Masters Candidate in International Affairs, Elliott School, George Washington University [email protected] [email protected]
Agenda • Reflections on the U.S.-India Civil Nuclear Trade Agreement • U.S.-UAE 123 Agreement, subsequent failed tender proposal, and civil nuclear trade legacy • Evidence of a dysfunctional public-private relationship in nuclear security and its effects on U.S. foreign policy and security posture • Proposals for greater public-private collaboration in nuclear security
U.S.-India Civil Nuclear Agreement • Macro Effects • Brought India from international marginalization to accepted nuclear power • Provided access to international nuclear technologies and fuel • Potential ascension to international organizations
• U.S. Objectives • Foster new era of strategic engagement • Develop new commercial relationship with billions in potential nuclear export content • Eliminate the most contentious outstanding impediment to a fully functional relationship of strategic allies • Empower democracy regionally by strengthening ties • Bring India into the nonproliferation fold
Results? • U.S. companies have not begun construction on a single nuclear unit in India • No restraint by India on issues on nuclear proliferation • An unreliable and, at times, frustrating regional partner • Ill-timed Agni-V launch • Reluctance to cut Iranian petroleum imports • Circumvention of financial transaction sanctions on Iran
• Seemingly insurmountable regulatory hurdles on the issue of nuclear liability
Timeline of the UAE Nuclear Deal January 2009: U.S. and UAE sign agreement on nuclear cooperation and sign 123 Agreement
December 2006: Gulf Cooperation Council Meets to discuss the peaceful pursuit of nuclear power
March 2010: KEPCO awards construction contracts to Hyudai and Samsung worth $5.59 billion
April 2008: UAE Publication of the Peaceful Use of Nuclear Energy
2007
2006
March 2007: At the urging of U.S. and in expectation of a nuclear technology transfer, UAE passes first domestic export control law
2008
2009
UAE begins to sign MOUs with potential technology providers
2010
December 2009: Shortly after an official visit by President Lee, ENEC announces the KEPCO consortium as the winning bid
January: UAE-France MOU
2006: US transfers $1.66 billion in military hardware to UAE April: UAE-U.S. MOU
May: UAE-UK MOU
Mid-2009: UAE reduces list of suitors from 9 to 3 and accepts bids from Areva, KEPCO, and GE Hitachi
2011
December 2011: UAE and South Korea sign an MOU arranging the transfer of nuclear information, research, education and training
2012 Mid-2012: Construction on UAE’s first nuclear plant slated to begin
Costs of the UAE Deal • Reconstitution of debate on the goals of 123 Agreements • Misbranding, the ‘gold standard’, and the disconnect between security and commercial camps • Revitalization of Congressional involvement and role • HR 1280 • Politicization of nuclear security
• Uncertainty surrounding future negotiations puts U.S. exports at further disadvantage • Void will be filled by nuclear exporters with less stringent trade agreement requirements • How much of a role the U.S. will play is a matter of our own determination
Need for a Public-Private Relationship • India Deal • Unrealistic private sector expectations • Ceded an influential source of bilateral leverage without due compensation and tangible benefits • Strategic and commercial goals left unrealized
• Failure to duly evaluate potential sources of gridlock • Bhopal Legacy
• UAE Deal • Political pursuit of nuclear agreement not matched with a viable commercial offer • Offer of commercially unproven Gen III technology
• Enormous investment of diplomatic capital unmatched by the private sector with reverberating consequences
Path Forward, Policy Recommendations • I. Broad-ranging collaboration building • Create a platform for public-private collaboration • Establish a USG-Industry steering committee
• The private sector must be afforded the opportunity to offer its unique insight to public stakeholders • Shed Cold War era mentalities of security
• II. Use collaboration to prioritize and structure • Closer ties to foster realistic expectations of market opportunity (India) • Use private sector consultation to determine and pursue the most pressing nuclear trade and security agreements (UAE)
• III. Increase private sector capacity • Lack of privatized fuel cycle options • Government has a role to play in identifying structures and to lead the team USA approach
Questions or Comments? Bradford Simmons Masters Candidate in International Affairs, Elliott School, George Washington University [email protected] [email protected]
