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TO RUEHC/SECSTATE WASHDC IMMEDIATE 7127
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S E C R E T SEOUL 000273 
 
SIPDIS 
 
E.O. 12958: DECL: 02/22/2030 
TAGS: PREL PGOV PINR ENRG KNNP MNUC ECON KS KN JA
CH 
SUBJECT: VFM CHUN WARNS THAT ROK-U.S. CIVILIAN NUCLEAR 
COOPERATION AGREEMENT RENEGOTIATION COULD BECOME "DEFINING" 
ISSUE IN BILATERAL RELATIONS 
 
Classified By: Ambassador D. Kathleen Stephens.  Reasons 1.4 (b/d). 
 
Summary 
------- 
 
¶1. (S) Vice Foreign Minister Chun Yung-woo told the 
Ambassador February 17th that revising the ROK-U.S. Civilian 
Nuclear Cooperation Agreement (CNCA) could soon become a 
"defining issue" in ROK-U.S. relations.  The issue, he 
warned, was already drawing significant amounts of negative 
press attention and had to be handled skillfully.  The ROK 
was now one of the world's top five nuclear power producers; 
other members of that "club," including Japan, all had the 
capability to reprocess spent fuel.  Public opinion would not 
tolerate the perception that Korea was being discriminated 
against vis-a-vis Japan, Chun emphasized.  The ROKG view of 
the way forward was for very quiet negotiations, with no 
publicity, resulting in a USG agreement that Korea had the 
right to reprocess.  That, Chun claimed, would defuse critics 
and shift public debate to the issue of cost.  The 
budget-busting cost of a reprocessing facility meant that the 
ROK would not actually reprocess spent fuel "during the next 
20 years,8 although a reprocessing facility would eventually 
be built, likely near Kyongju.  Negotiations had to begin in 
the second half of 2010, Chun argued, with the USG 
represented by an ambassadorial-level official.  End Summary. 
 
Comment 
-------- 
 
¶2. (S) This was an unusually strong presentation from an able 
and experienced diplomat with a strong affinity for the 
United States.  Koreans, and the Lee Myung-bak Administration 
in particular, are extremely proud of having won the recent 
nuclear reactor contract for the United Arab Emirates, and 
view the nuclear industry as both a source of national pride 
and a significant contributor to the economy.  Chun's 
presentation over lunch was probably an opening gambit rather 
than the ROKG's bottom line, and we do not agree with the way 
that Chun characterized various aspects of this complicated 
issue, but he is right to flag the potential for damage to 
the overall bilateral relationship if the United States is 
perceived here as hamstringing the ROK effort to develop its 
nuclear industry.  This will need careful handling.  End 
Comment. 
 
VFM Chun:  Watch Out... 
----------------------- 
 
¶3. (S) During a February 17 lunch hosted by Ambassador 
Stephens that covered other topics (septel), ROK Vice Foreign 
Minister Chun Yung-woo emphasized the urgent need to revise 
the ROK-U.S. Civilian Nuclear Cooperation Agreement (CNCA), 
which is set to expire in 2014.  The issue, he warned, was 
already drawing significant amounts of negative press 
attention and attracting "grandstanding politicians" like 
Liberty Forward leader Lee Hoi-chang, who earlier in the day 
had publicly lectured a MOFAT Director-General about the need 
to "regain our nuclear sovereignty."  The ROK was now one of 
world's top five nuclear power producers/users; other members 
of that "club," including Japan, all had the capability to 
reprocess spent fuel.  Public opinion would not tolerate 
Korea being discriminated against vis-a-vis Japan, Chun 
emphasized. 
 
...Because This Could Become a "Defining Issue" 
--------------------------------------------- -- 
 
¶4. (S) Chun asserted that revising the CNCA could, in time, 
become a "defining issue" in ROK-U.S. relations.  It had to 
be handled with tact, skill, and "very little publicity," 
Chun stressed.  Summarizing the ROKG view of the issue, the 
VFM said political conservatives strongly believe the ROK 
unfairly forfeited its right to reprocess spent fuel by 
signing the 1992 "Joint Declaration of South and North Korea 
on Denuclearization of the Korean Peninsula."  With the rapid 
growth and sophistication of the ROK civilian nuclear energy 
industry, Chun said, it now made economic sense for the ROK 
to consider reprocessing. 
 
ROKG Vision of the Way Forward 
------------------------------ 
 
¶5. (S) The CNCA needed to be revised to permit reprocessing 
and completed by the end of 2013 at the latest but preferably 
by the end of 2012, according to the vice foreign minister. 
 
 
Simply renewing the agreement would be unacceptable, Chun 
said, explaining that renewal would be viewed "as a fiasco" 
by politicians across the political spectrum.  Chun asserted 
that the ROK should quickly be given the right to reprocess. 
That, he explained, would defuse critics and shift public 
debate to the issue of cost.  The estimated USD 10 billion, 
budget-busting price tag of a reprocessing facility meant 
that the ROK would not actually reprocess any spent fuel 
"during the next 20 years," according to Chun, who added that 
building a storage facility was a lot cheaper. 
 
¶6. (S) At some future point, though, Korea would have to 
build a reprocessing facility, Chun continued.  Even if the 
United States, China, or Russia agreed to store ROK spent 
fuel, transporting it was costly and potentially dangerous, 
as environmental protesters would be out in force at key 
Korean ports.  The Korean Hydro and Nuclear Power Corporation 
(KHNPC), Chun said, would probably build a reprocessing 
facility near Kyongju and the massive Wolsong nuclear power 
site.  The KHNPC has already publicly pledged to move its 
headquarters to Kyongju, Chun explained, adding that the 
KHNPC would likely "sell" the reprocessing facility to the 
public as a potential hub of high-tech, high-paying jobs that 
would be a huge boost to the local economy. 
 
ROK View of Negotiation Process 
------------------------------- 
 
¶7. (S) In terms of the negotiation process, Chun said the 
joint feasibility study on pyroprocessing was a good start. 
(Note: Post delivered a non-paper January 22 outlining the 
conditions under which the U.S. would be able to undertake 
with the ROK a joint study of the technical, economic, and 
non-proliferation aspects of pyroprocessing.  We are still 
awaiting a formal response from the ROKG.  End note.)  The 
study, though, would take at least two years.  Chun stressed 
that the two sides "can't just wait and leave it to the 
experts."  Formal talks had to begin in the second half of 
2010, Chun argued.  The lead ROK negotiator was Deputy 
Foreign Minister Cho Hyun, an ambassadorial-level official; 
the State Department, Chun said, needed to appoint an 
ambassador as Cho's counterpart.  It would be unacceptable to 
the ROK to have the United States represented by a State 
Department office director-level official, Chun stressed. 
STEPHENS