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A public policy blog from AEI
Next month, Saudi Arabia is expected to announce the winner of a multi-billion dollar contract to build a pair of nuclear power reactors in the Kingdom. At the Munich Security Conference last weekend, Saudi Arabia’s Foreign Minister Adel al-Jubeir publicly urged the Trump administration to allow Riyadh to develop its own nuclear fuel for self-sufficiency, essentially side-stepping the required 123 agreement. These type of agreements are a federal requirement set by the US Atomic Energy Act of 1954 for the peaceful transfer of nuclear material, equipment, and components from the US to a recipient country, as well as serving to regulate technical exchanges, scientific research, and safeguard discussions.
President Trump and his national security team face a particular conundrum — alter the federal regulation to secure the lucrative contract for an American-headquartered corporation, or abide by precedent and make the contract conditional on the guidelines set forth by Congress to guard against global nuclear proliferation.
The contract would deliver billions of dollars to Westinghouse, a Pennsylvania-based subsidiary of Toshiba facing bankruptcy (which is considering a foreign takeover offer from Canada’s Brookfield Asset Management). With Saudi Arabia’s Crown Prince Mohammed bin Salman (MbS) set to visit the US in the beginning of March, such a contract could be critical for touting Trump’s repeated pledge of “America First.” Similar commercial announcements have been common practice among foreign delegations making their way to Washington. MbS could use this as an opportunity to demonstrate Riyadh’s commitment to investing tangibly in the US-Saudi partnership. Weighing as well on President Trump’s mind is the Pennsylvania congressional map recently struck down by the courts. Such a contract could be critical to Republican constituents in a state the President narrowly won in 2016.
Saudi Arabia’s central argument for getting a pass from the 123 agreement is that Iran has been allowed, under the 2015 nuclear deal, to enrich its own uranium for commercial use. The Kingdom sees no reason why Riyadh should be treated less favorably than Tehran (ironically an American adversary) and would like to have the option to do so as well, especially since Riyadh would abide by the Non-Proliferation Treaty (NPT).
However, the weakening of standards which govern proliferation and safety risks associated with using nuclear material shouldn’t be traded for short-term economic gain. A 123 agreement is an important legal framework for peaceful nuclear cooperation and stipulates that the recipient country adheres to US-mandated nuclear nonproliferation norms. So far the US has entered into 23 123 agreements, including with other countries in the Middle East such as Egypt, the UAE, and Turkey. In particular, the UAE’s agreement developed under the Bush administration is considered one of the most stringent. The UAE agreed to not enrich or reprocess uranium under the stipulation that the agreement could be renegotiated if the US enters into a less binding agreement with another state. President Obama called it “a model for other countries in the region.”
While commercial use of nuclear power by Saudi Arabia could be a positive development in allowing the Kingdom to reduce domestic consumption of oil and support their economic reform process, the real danger of letting Riyadh off-the-hook is that similar to Iran, Riyadh would be given a clear pathway to developing their own nuclear weapon. It would also be a critical dent in the US’ efforts of using the 123 agreement as a bulwark against nuclear proliferation globally.
A nuclear-armed Gulf would be a dangerous development in a part of the world that is infamous for illicit transfers of financial and other resources. With Russia’s resurgence in the Middle East and the United States firmly behind MbS, the president should consider carefully the lasting legacy he could leave in the Gulf. The US should not give MbS a pass if Riyadh doesn’t want to play by the rules.
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