South Korean and U.S. negotiators appear to be close to reaching an accord on a text to replace the so-called 123 agreement that governs bilateral nuclear commerce between the two countries. Although the negotiations are highly technical, ongoing disagreement over key issues has increased the political stakes in the two allies’ relations, particularly within South Korea.

Since South Korean President Park Geun-hye and U.S. President Barack Obama met in Seoul in April 2014, compromise language on key elements and a broader political solution are said to have come into view, as well as an agreement in principle on a framework for dealing with contentious issues. If true, this would be welcome news, as it would prevent a lapse in the agreement and hopefully produce a 123 advantageous to both sides. But it may also presage a potentially more difficult period ahead, particularly for the South Korean government, which will need to build public support for an outcome that falls short of Seoul’s stated maximalist demands. Perhaps it is time to hand the issue from the technical negotiators to the public relations gurus.

Challenging Negotiations

The original 1974 agreement was set to expire in March 2014, but disagreement over the terms forced negotiators to put more time on the clock. They agreed to a two-year extension to avoid a lapse in the agreement that would have led to the loss of jobs and disruption of nuclear trade. The central issues that have complicated negotiations are uranium enrichment and spent-fuel reprocessing, often abbreviated ENR. The South Korean nuclear establishment believes these capabilities are critical for the country’s future as both a consumer and an exporter of nuclear energy. The United States opposes adoption of these technologies by South Korea and other countries because they can be used to produce fissile material for nuclear weapons.

To obtain such a capability while addressing U.S. proliferation concerns, Seoul has proposed to develop a new technology called pyroprocessing—an experimental method that it argues is proliferation resistant and is not reprocessing of spent nuclear fuel. South Korean nuclear scientists claim this technology could solve the country’s looming spent-nuclear-fuel storage crisis by reducing the volume of spent reactor fuel. Seoul also argues that enrichment capabilities would guarantee a supply of fuel for domestic consumption and enhance future sales of nuclear power plants abroad by enabling South Korea to supply fuel along with reactors.

Washington has rebuffed Seoul’s interest in both technologies thus far and has sought to avoid politicizing the issue and instead find a technical solution at the working level. The United States does not want to jeopardize the global nonproliferation regime or set unwanted precedents for bilateral agreements with other partners, although it does seem prepared to find compromises to reflect the importance of the overall relationship with South Korea.

A number of challenges have prevented timely agreement, leading to the extension. The overarching challenge has been to reconcile competing U.S. and South Korean presidential priorities and their approaches: Obama is personally vested in global nuclear nonproliferation objectives and preventing the further spread of ENR technology. Meanwhile, former South Korean president Lee Myung-bak and now Park are both personally vested in their national objective of energy security, which South Korea’s nuclear research establishment argues can be achieved through ENR. Negotiators, meanwhile, have faced the difficulty of devising language for the 123 agreement that provides predictability for Seoul and off-ramps for Washington that ensure the United States is not tied to a time-bound requirement to agree to allow ENR capabilities for South Korea. The other looming challenge facing both governments is how to sell the agreement, particularly to the South Korean public and perhaps to some members of the U.S. Congress.

Political Evolution

The politicization of U.S.–South Korea nuclear technology cooperation evolved slowly in the context of Seoul’s aspirations to become one of the world’s top-five nuclear energy producers. The crux of it started to emerge publicly during the administration of former president Roh Moo-hyun in the mid-2000s. When his successor, Lee Myung-bak, came into office in 2008, he vowed to be the “economy president” and employed what his administration called “resource diplomacy” to secure natural resources at home while cooperating with foreign partners on projects related to them.

In an address on August 15, 2008, Lee defined “green growth” as the new national development paradigm for the next sixty years. His administration chose nuclear energy as a practical alternative energy source and an essential engine in its National Green Growth Strategy to achieve economic growth, energy security, and carbon emissions reductions as well as to create jobs. The administration also believed Seoul’s climate change goals could not be achieved without an ambitious nuclear energy production strategy.

“Energy independence” became a cornerstone of Lee’s framework to address South Korea’s long-term energy needs. South Korea imports almost all of its energy, at a cost that is reportedly greater than what the country earns in producing automobiles, semiconductors, and ship exports—its main growth drivers. Nuclear-energy-related business was envisioned as the next profitable sector, and the Lee administration openly called for technological independence from foreign technology sources.  

Nuclear scientists and senior officials in the foreign ministry and presidential office began linking this goal explicitly to South Korean development of ENR capabilities. The Lee administration seems to have viewed a replacement 123 agreement with ENR approval as the final key to fully realizing its national vision despite other states having developed significant nuclear energy sectors without ENR.

Meanwhile, official U.S.–South Korea discussions on pyroprocessing began in the mid-2000s during annual meetings of the Joint Standing Committee on Nuclear Energy Cooperation (JSCNEC), a bilateral working group formed in 1980 to deal with a range of technical and policy matters. The allies had begun initial collaboration on pyroprocessing research in the early 2000s, building on the U.S. investigation of the technology in the 1990s. South Korean interest in pyroprocessing for spent-fuel management aligned with the U.S. Department of Energy’s global vision for nuclear energy technology development, including for the management of U.S. spent fuel, under the administration of then U.S. president George W. Bush.

In 2007, Seoul’s lead negotiating agency, the Ministry of Science and Technology, reportedly first proposed at a JSCNEC meeting that a joint study be conducted on pyroprocessing in the context of replacing the expiring 123 agreement. However, U.S. officials began to have concerns about proliferation risks associated with pyroprocessing, leading to a pause of this cooperation during the Bush administration; meanwhile, the Department of Energy also determined that pyroprocessing is reprocessing. Instead, the two countries later agreed to a ten-year Joint Fuel Cycle Study in 2011 dealing with broader issues including pyroprocessing. When 123 negotiations began in 2010, the Obama administration made clear to Seoul the determination that pyroprocessing is reprocessing.

Politicization in South Korea

Against this backdrop, there were two pivotal moments that resulted in the politicization of the 123 agreement negotiation launched in October 2010. The first moment came prior to the commencement of talks, when Seoul was said to have requested that Washington appoint a senior administration official with political clout and knowledge of South Korea to lead the U.S. delegation. The new representative would take the place of the State Department’s usual functional specialist—who has technical expertise and not necessarily regional expertise—in all 123 negotiations. This request demonstrated Seoul’s political sensitivity to the issue and also elevated the issue to a higher-level bilateral political dialogue. Washington named a senior-level political appointee to lead the U.S. delegation, but he was still a functional specialist.

As negotiations proceeded, South Korea’s desire for the United States to incorporate consent on pyroprocessing into the agreement gradually became known to small circles of experts in Seoul and Washington. Seoul’s enrichment aspirations soon entered the negotiations as well in a push by some proponents in the South Korean government and nuclear establishment who viewed enrichment as a potential moneymaking venture compared to pyroprocessing.

The second pivotal moment occurred when Park Geun-hye began to engage the issue during her presidential campaign and to elevate it in discussions with U.S. officials. As a candidate, Park pledged to replace the outdated 123 agreement and to support South Korea’s nuclear reactor industry in overseas markets as the nation’s new growth engine. This was a clear signal that the issue would be a presidential priority if she were elected into office.

During and after her transition into the South Korean presidential office of Cheong Wa Dae (“Blue House”), Park requested Washington’s cooperation on the 123 negotiations in a series of meetings with visiting U.S. delegations led by Kurt Campbell, then assistant secretary of state for East Asian and Pacific affairs, in January 2013; by House Committee on Foreign Affairs Chairman Ed Royce in February 2013; and by U.S. Senator Bob Corker in March 2013.

A month later in a meeting with visiting U.S. Secretary of State John Kerry, Park called for a “creative approach” to achieve an “advanced and mutually beneficial agreement.” South Koreans interpreted her comments essentially as a request for ENR, placing a burden on Washington.

South Korean Foreign Minister Yun Byung-se later explained in a press briefing that a “mutually beneficial agreement” would address elements that became known as Park’s three goals:

  • Spent-fuel management
  • Reliable access to enriched fuel
  • Export competitiveness

Unlike her predecessors, Park has framed South Korea’s civil nuclear energy goals in terms of practical needs as opposed to explicit calls for particular fuel-cycle technologies. South Koreans would typically see no difference between this framing and Seoul’s position during the Lee administration on ENR—pyroprocessing to alleviate spent-fuel management problems, and enrichment to guarantee a reliable enriched-uranium fuel supply and to promote South Korea’s export competitiveness. However, U.S. officials and experts seemed to take Park’s three goals literally and regarded them as not requiring ENR to ensure an advanced civil nuclear program. They also believed solutions existed to achieve Park’s objectives without ENR.

The final part of this pivotal period came when Park addressed a joint session of the U.S. Congress during her May 2013 state visit to Washington. She called for a “modernized, mutually beneficial successor to our existing civil nuclear agreement.” In her meeting with Obama, Park was said to have gone off script and underscored the seriousness of her country’s spent-fuel problem.

The Disconnect

Though pyroprocessing and enrichment emerged as central political issues over time, the broader impasse can be traced to fundamental differences in the allies’ approaches to the 123.

For Seoul, the 123 negotiations, while rooted in making a technical case, have both economic and political meanings. Seoul’s focus is trust and the strength of the alliance—South Korean leaders feel that their country’s strategic and economic importance and outstanding record as an ally should make the United States willing to grant permission for ENR, given the importance of this issue to South Korea.

For Washington, these are prima facie technical negotiations, but they are driven by regional and global nonproliferation, security, and nuclear disarmament objectives—even more so for the current U.S. president, who has a personal interest in nonproliferation. The U.S. policy focus in general is on the threat of reprocessing and enrichment, as well as the precedent it would set for U.S. global nonproliferation policy when negotiating 123 agreements with other countries if Washington granted ENR consent to South Korea. In the U.S. view, the 123 agreement and its policy toward South Korean adoption of advanced nuclear capabilities should not be a litmus test for the strength of the alliance; but it is an important global signal of the Obama administration’s intent to limit the spread of ENR technologies, particularly to countries that do not already possess them.

The U.S. approach naturally has South Koreans either scratching their heads or shaking their fists. Washington long ago granted ENR rights to Japan—another U.S. ally and non-nuclear-weapon state that South Koreans suspect would be inclined to weaponize at any given time—and India, a nonsignatory of the Nuclear Non-Proliferation Treaty (NPT). It is even more shameful to South Korea that the United States would be prepared to allow Iran—a so-called rogue state in violation of its International Atomic Energy Agency and NPT commitments—to have a limited enrichment capability as part of a final deal to resolve the ongoing nuclear dilemma. Thus, South Koreans can only conclude that if Washington agreed to anything less than it provided Japan, India, and now Iran, it would signify that the United States viewed South Korea as an untrusted, third-tier ally . . . or less.

For some South Korean proponents, then, the political significance of ENR rights is now tied directly to the country’s self-image as a first-tier U.S. ally and an aspiring nuclear energy giant. At the very least, if Washington acknowledged Seoul’s right to enrich and pyroprocess while trusting Seoul not to exercise those rights, that would signify to some South Koreans that the United States was treating it as a first-tier ally. In this case, symbolism and perception would be just as important as a technical victory for those proponents.

For its part, Washington does acknowledge the right of NPT parties to the peaceful useof nuclear energy stipulated in Article IV of the treaty, but it has not recognized the right to a particular technology. This stems from Washington’s long-standing opposition to the spread of ENR. Acknowledging the ENR rights of one country would demonstrate that Washington accepts such a right for all NPT parties. The U.S. rationale for permitting India and Japan to enrich uranium and reprocess spent nuclear fuel was that they had already possessed such facilities.

The United States and the EU members engaged in negotiations with Iran—Germany, the United Kingdom, and France—may reluctantly allow Tehran to continue enriching uranium under significant constraints as part of a negotiated agreement to prevent a potentially grave threat to international peace and security. However, they do not plan to recognize Iran’s right to enrich or reprocess. They also note that they have imposed a very high cost on Iran in the form of hundreds of billions of dollars in sanctions and severe isolation.

The U.S. refusal to grant ENR represents to many South Koreans an inequality in the alliance, leading some to call for “nuclear sovereignty”—which would reduce Seoul’s dependence on the United States and ensure its treatment as a trusted, full-grown, equal partner in an alliance described at the April 2014 summit as a “global partnership.” In other words, such thinking represents their desire to no longer be treated as the restricted, so-called younger brother that it has been since the 1950–1953 Korean War.

Politically, these South Korean proponents believe that receiving a U.S. stamp of approval for ENR would also help the country’s self-image in terms of its key aims—becoming a world nuclear-energy powerhouse, generating power plant sales, and developing its economy. Advocates believe that technical maturity, with the abilities to recycle South Korea’s spent fuel and enrich uranium to provide fuel services with its exported reactors, would aid global perceptions that Seoul is a world leader in nuclear power. Critics, however, point to South Korea’s recent scandal over fake reactor parts and nuclear power plant safety concerns, putting into question Seoul’s ability to achieve its desired standing in the global market.

Political Solution, Compromise Agreement, or Both?

The reality of the disconnect between Seoul’s desire for ENR and Washington’s imperatives to buttress the global nonproliferation regime began to become clearer and widely known publically in South Korea during a private visit to Seoul by the Obama administration’s former chief negotiator-turned-think-tank-expert Robert Einhorn in October 2013. Realizing that South Korea was unlikely to achieve its maximalist aims, some South Korean opinion elites began to consider the need for a creative negotiating formula or a political solution to a problem that many South Korea–watchers warned could shake the alliance.

In other words, if Seoul did not receive U.S. permission to obtain ENR, a face-saving measure would be needed given public expectations derived from the politicization of the negotiations in South Korea. Due to the structure and dynamics of the Park administration as well as the general interest in both countries to elevate the alliance relationship, which is currently enjoying a historic high, such a solution would warrant a decision at the presidential level.

The general South Korean definition or perception of a political solution would essentially envision an agreement between the two presidents that grants Seoul advanced consent to undertake enrichment and pyroprocessing, whether that comes in the form of an acknowledgement of rights that might not be exercised in the near future or, preferably, a blanket consent. A practical solution to support the politics, in Seoul’s view, would be an agreement modeled after a combination of key elements from the U.S.-Japan 123 and U.S.-India 123 agreements.

A general U.S. definition of a political solution might be one in which the American president instructs negotiators to reach a compromise agreement without consenting to ENR this time but that possibly leaves the door open to revisit contentious issues as needed when certain technical, geopolitical, security, and nonproliferation conditions are met. This would prevent both a lapse in the agreement and negotiations from continuing until the eleventh hour, which could strain relations.

A political solution—though a broader one—may still be possible, but it would require reframing the issue and heralding compromises as victories for both sides.

Negotiating among friends and allies is often more complicated due to the desire to satisfy the other party, which goes beyond solely pushing one’s interests. The reality is that no one party can achieve its maximalist demands. Compromises are necessary.

A 123 compromise agreement would entail both sides beginning with some flexibility, open-mindedness, and an understanding of the other’s situation. Washington must understand the political and economic demands in Seoul, while Seoul must recognize the depth of Washington’s commitment to halting the spread of enrichment and reprocessing technologies. Both sides have minimum requirements as well as maximalist wishes that will provide the contours of a compromise agreement. For example, in order to claim victory on its future potential for ENR, Seoul might seek language that would provide a future commitment by Washington to conditional consent or consideration to possibly approve uranium enrichment and spent-fuel pyroprocessing if and when South Korea meets certain strategic, security, scientific (depending on the results of the ten-year joint study), and economic conditions. Similarly, a compromise agreement might allow South Korea to conduct certain scientific activities under a broader agreed scope of research. Or, a compromise agreement might enable further ENR discussions within the duration of the new agreement if any of the above conditions change or evolve, without having to renegotiate the entire 123 agreement. These are some examples of ways South Korea’s political and economic considerations could be met creatively without crossing U.S. redlines.

Any of these would demonstrate U.S. consideration for its close ally’s domestic issues while allowing opportunities to capitalize on what-ifs—for example, what if South Korea makes a scientific breakthrough that can help resolve both states’ spent-fuel problems? These steps would also demonstrate Seoul’s understanding of Washington’s global nonproliferation imperatives and its inability to grant ENR even to a close ally, particularly in today’s global security environment, while still achieving progress on its wish list.

At a higher level of strategic communications, a compromise agreement would also need to highlight concrete actions that enable President Park to claim political victory without acquiring complete ENR capabilities at this time. This would require proclaiming that all three of Park’s objectives have been satisfied and more. Here, too, there are several potential avenues Washington and Seoul could take:

  • Explore creative ideas to solve Korea’s spent-fuel storage problems, including cooperating on other novel or practical technologies and sending spent fuel to a third country for reprocessing.
  • Facilitate Seoul’s acquisition of shares in overseas enrichment facilities.
  • Support South Korea in securing its fuel supply.
  • Facilitate South Korean exports, including by easing some conditions on its retransfers of U.S.-origin equipment and parts for reactor exports to third countries.

Some of these ideas for a compromise agreement and concrete actions have been on the negotiating table. Under the current circumstances, adopting any of them would help frame the narrative that this is a good agreement for both parties.

One way to go beyond Park’s three objectives could be to expand nuclear trade for joint U.S.–South Korea cooperation in third countries. This would elevate the symbolism of the 123 to a strategic partnership that strengthens both countries’ competitiveness in the global nuclear market. It would also ensure the highest nonproliferation, safety, and security standards as nuclear parts and materials continue to spread along with the expansion of nuclear energy across the world, particularly in Asia and the Middle East. Such a partnership could become a new global standard for peaceful nuclear cooperation in third countries.

The final, and perhaps equally important, piece of this puzzle is devising the right communications strategy in both capitals about the new 123. It would need to differentiate the South Korea 123 from other bilateral agreements to show how it is more advanced, unprecedented, and “modern,” in President Park’s terminology. This would be especially important if the rollout of the new agreement gets tangled up in other hot political issues, such as South Korea–Japan relations or sticky alliance matters, in which the 123 could become hostage, its merits unnoticed or, worse, misrepresented.

The right communications strategy would also need to underscore that South Korea is not and has never been subject to the “gold standard”—U.S. insistence that a country legally forswear enrichment and reprocessing capabilities, for example as stipulated in the 123 with the United Arab Emirates. South Korean victories in the new 123 will be noticeable to an expert eye, but for public relations, the key is translating technical jargon into easily understood language so that technical compromises can also be heralded as political victories.

Since public records so far do not indicate Park explicitly requesting ENR, perhaps the political solution via a creative formula, which could also provide a face-saving measure for Seoul, already exists in her three goals.

If this is acceptable for the allies, and if an agreement is in sight, then it may be high time to devise an effective communications strategy in both capitals.