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U.S., Vietnam in Nuclear Talks Amid Power Competition

President Barack Obama greets Vietnamese Prime Minister Nguyen Tan Dung during the Nuclear Security Summit in Washington, D.C. Photographer: Jewel Samad/AFP/Getty Images
President Barack Obama greets Vietnamese Prime Minister Nguyen Tan Dung during the Nuclear Security Summit in Washington, D.C. Photographer: Jewel Samad/AFP/Getty Images

Aug. 6 (Bloomberg) -- The U.S. and Vietnam are holding negotiations on sharing nuclear fuel and civilian nuclear technology, an agreement that will enable American companies to invest in the Southeast Asian country’s atomic industry.

The talks build on a March agreement between the countries to expand cooperation on peaceful nuclear energy that may aid U.S. companies such as General Electric Co. Vietnam said in June it plans to build as many as 13 nuclear power plants with a capacity of 16,000 megawatts over the next two decades.

The discussions come after President Barack Obama won commitments in April from 46 nations to lock down nuclear material and keep it away from terrorists. As part of those efforts, the U.S. is pushing for fewer countries to enrich uranium, a point with which Vietnam currently agrees.

“Vietnam doesn’t intend to enrich as of now because of expensive and very sensitive technology,” Vuong Huu Tan, president of the government-affiliated Vietnam Atomic Energy Institute, said by phone today. “Vietnam doesn’t want to make its international relations complicated.”

Authorities in Hanoi are reviewing draft documents of the deal before seeking Prime Minister Nguyen Tan Dung’s approval, Tan said. Negotiations between the two countries haven’t started yet, according to a faxed statement from the Ministry of Foreign Affairs in Hanoi today.

The U.S. is seeking to promote “the appropriate use of civilian nuclear energy under strict international supervision,” State Department spokesman Philip J. Crowley said in Washington yesterday. U.S. law requires a so-called 123 Agreement for Peaceful Cooperation for exports of nuclear material, equipment or components. Such agreements are already in place with most of Europe and about 20 other countries, including China and India.

Seeking Contracts

Russian, Japanese, Chinese, French and U.S. companies are vying for contracts to build nuclear plants in Vietnam. The country may face a shortage of almost 1 billion kilowatt-hours of electricity this year with consumption possibly increasing as much as 18 percent, the government said April 6.

Japan’s Trade Minister Masayuki Naoshima will visit Hanoi this month with executives from companies such as Toshiba Corp. and Mitsubishi Heavy Industries Ltd. to win business, Nikkei reported yesterday. Earlier this year, China’s Guangdong Nuclear Power Group Co., the nation’s No. 2 reactor builder, signed a nuclear cooperation agreement with Vietnam.

China acknowledges that all countries have the right to develop nuclear technology for peaceful purposes so long as they meet their obligations not to engage in proliferation, Jiang Yu, a spokeswoman for the Foreign Ministry, said in a faxed response to questions about the talks.

‘Double Standards’

Negotiations with Vietnam show “double standards” by the U.S. as it promotes denuclearization, the China Daily newspaper cited Teng Jianqun, deputy-director of the China Arms Control and Disarmament Association, as saying yesterday. Vietnam is one of 189 countries that are party to the NPT.

Russia’s Rosatom Corp. was selected to build Vietnam’s first nuclear power plant, Ngo Dang Nhan, director general of the Vietnam Agency for Radiation and Nuclear Safety, said June 17. The value of the deal with Moscow-based Rosatom, Russia’s state atomic energy corporation, wasn’t disclosed.

The Obama administration has pushed exports of civilian nuclear equipment as part of efforts to double U.S. exports during the next five years to about $3.1 trillion, supporting 2 million additional jobs. Commerce Department officials last month held a trade mission to Slovakia, Poland and the Czech Republic to boost sales of nuclear energy products.

More 123 agreements would help U.S. companies such as GE and Westinghouse Electric Company LLC compete for contracts across Asia. The U.S. is in talks with other countries on the agreements, Crowley said, without naming them.

UAE Accord

The “gold standard” of nuclear technology deals is an agreement the U.S. negotiated with the United Arab Emirates last year, Crowley said. As part of that arrangement, the Persian Gulf state decided “that it would forgo the right of enrichment that every country in the world has,” he said.

The U.S. negotiates such agreements on a country-by-country and region-by-region basis, Crowley said. He indicated that the U.S. would like to see Vietnam take the same approach as the UAE, and forgo the possibility of enriching uranium, which can be used to make nuclear weapons.

“We certainly want to see other countries make that same kind of decision and that same kind of agreement,” he said.

The U.S. and Vietnam established diplomatic relations 15 years ago after ending a war in 1975 that killed 58,000 U.S. soldiers and more than 3 million Vietnamese. Secretary of State Hillary Clinton said the U.S. is ready to take relations with Vietnam to a “new level” during a visit to Hanoi last month.

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net.

To contact the editors responsible for this story: Mark Silva at msilva34@bloomberg.net; Bill Austin at billaustin@bloomberg.net

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