President Obama came away from the Korean trade negotiations last week looking much diminished. "U.S. Wields Less Clout at Summit" was the typical headline in the Wall Street Journal.
All this was attributed to many factors -- the slow recovery of the economy, the failure of Keynsian spending, Obama's election losses or the Federal Reserve's egregious attempts to promote trade advantages by weakening the dollar. Meanwhile, the Koreans refused to be cowed, saying the fault lay with the U.S., which hadn't given them enough to review the revisions made in the original agreement struck with President Bush.
Much is obviously due to the President's egotism. As Charles Krauthammer pointed out on Fox News, "Obama constantly feels compelled reinvent the wheel." He can't accept anything from previous Presidents but must put his personal stamp on everything. Thus, he felt compelled to rewrite a perfectly suitable trade agreement handed him by the Bush Administration -- and missed a deadline in the process. Meanwhile, Bush was winning loads of admiration by refusing to say a single unkind word about Obama during his book tour --- even as the new President has spent his entire two-year term blaming everything on his predecessor.
If you really want to see one of the underlying causes for America's diminishing role in the world, however, take a look at another set of negotiations taking place in Washington right now between Korea and the U.S. over the 1974 Nuclear Fuel Treaty due for renewal in 2014.
At the time the original agreement was signed, the U.S. was leading the world in introducing nuclear power, the great new energy discovery expected to replace highly polluting coal. Korea, on the other hand, was a poor, Third World country, still recovering from the Korean War and ruled by Park Chung-hee, an autocrat who tried to make himself president for life before being assassinated in 1979.
Now flash forward 36 years. The U.S. has virtually abandoned nuclear technology, not having licensed a new reactor since 1976. We never recovered our nerve after Three Mile Island. Meanwhile, the rest of the world has shrugged off these fears and moved ahead. There are now 60 reactors under construction around the world, 20 of them in China, which only initiated a nuclear program in 2006. France, Russia, and Japan all have mature industries and are marketing their reactors and nuclear technology to more than 30 countries, including Vietnam, Indonesia, Sri Lanka, Saudi Arabia, Jordan, Morocco, Egypt, South Africa, Brazil, Venezuela, and many others.
Last year, those mature industries suddenly encountered a fierce new competitor -- South Korea. The Koreans have become a nuclear-happy country. They already get 40 percent of their electricity from nuclear (as opposed to our 20 percent) and are just getting into the business. Until 1995 they had the Japanese build reactors for them. Then they took an old design from Combustion Engineering (now a part of Japanese-owned Westinghouse) and designed the Korean Standard Nuclear Plant, a 1400-megawatt giant that has won praise throughout the world. The Koreans run their reactors at 95 percent capacity -- the only country in the world that exceeds our excellent 90 percent capacity. (We still know how to run reactors, we just aren't allowed to build them anymore.) All those years in which Korean students led the world in math and physics scores are finally paying off. The highest concentration of PhD's in the world is in Seoul.
Last year the Koreans bid against France's Areva and Japan's Westinghouse for the largest contract ever offered -- the job of building four new reactors in the United Arab Emirates. Although Areva and Westinghouse had much longer résumés, Korea shocked the field by winning the bidding at $20 billion. The whole country is now celebrating. Last month the government held National Nuclear Fair to introduce schoolchildren to the technology.
So after thirty years, the position of the two countries is almost completely reversed. Korea is now on the world's cutting edge in nuclear technology while the U.S. is trying to plug leaks in 40-year-old reactors. Yet to our diplomats, nothing has changed. We're still the masters of the universe.
Unfortunately, around 1974, we became obsessed with the idea that reprocessing spent nuclear fuel would lead to the proliferation of nuclear weapons around the world. Spent fuel, you see, contains small quantities of plutonium, the principal material for most nuclear weapons. If we isolated that plutonium during reprocessing, someone might steal it. The source of this anxiety was The Curve of Binding Energy, a book by New Yorker reporter John McPhee, in which his main source of information, maverick physicist Ted Taylor, predicted that "hundreds of explosions a year" could take place in American cities from stolen plutonium. In 1974, India did build a bomb with plutonium extracted from a research reactor given to them by the Canadians. And so, when we signed the agreement with Korea to supply them with nuclear fuel, we stipulated that they could not reprocess it.
On the other hand, reprocessing has become essential to any country such as Korea that is serious about a nuclear future. First, it eliminates the false problem of "nuclear waste" that has tied this country in knots. Reprocessing extracts the spent uranium and plutonium, which can be recycled as fuel, reducing the volume of spent fuel by 95 percent. France stores all its high-level waste beneath the floor of one room at Le Hague while we can't find room to put ours in the whole state of Nevada. Most important for Korea, it has no domestic uranium supplies and must depend entirely on imports. Reprocessing can cut its fuel imports by 30 percent.
While Korea has now moved way ahead of us on nuclear technology, to us it's still 1974. And so, our diplomats are telling the Koreans they can't reprocess their fuel. We're afraid they might make a bomb with it. The Koreans say they are being treated "like criminals" and suggest it's time to look at the relationship "through a new lens." Nonetheless, we're standing on past privilege. After all, this is our technology, isn't it?
Just think, South Korea shares a peninsula with a madman who has already built a nuclear bomb and threatens to use it any time. North Korea has already attacked South Korean ships and crossed the demilitarized zone. It's a wonder South Korea hasn't built a bomb already. Theoretically, it is under our "nuclear umbrella," but consider this. If North Korea dropped a bomb on Seoul tomorrow, does anyone really think we would retaliate by wiping Pyongyang off the map? Wouldn't we appoint a committee to study the matter instead? Wouldn't we have to file an environmental impact statement?
If our "nonproliferation experts" refuse to budge, it's more than likely the Koreans will turn elsewhere. The Russians are already volunteering to supply countries with nuclear fuel and then take it back for reprocessing. "The Russians have a peculiar level of comfort with all things nuclear," said a New York Times reporter recently, apparently not realizing it may be us who has a peculiar level of discomfort. Wouldn't it be ironic if, after fighting a war in which we suffered 50,000 casualties to keep South Korea out of the Soviet orbit, we should now turn them over to the Russians because of our inordinate fear of all things nuclear?
It's a sad story, as old as history -- a young, upstart country with great ambitions for the future confronting an aging society that has lost its nerve and wants to live off the privileges of its past. Only this time we're on the wrong side of history.