U.S., Ukraine Sign Nuclear Accord, Agree on MTCR Accession

March 1998

By Howard Diamond

At a ceremony attended by Secretary of State Madeleine Albright, the United States and Ukraine signed a nuclear cooperation agreement on March 6, based on a new commitment by Kyiv to end its nuclear cooperation with Iran. In addition, Albright announced that the United States would support Ukraine's entry into the Missile Technology Control Regime (MTCR) without insisting that Kyiv give up all of its offensive missile programs, as Washington had previously demanded of all new members.

The MTCR is a 29-member informal suppliers arrangement which seeks to limit the transfer of ballistic missiles and missile technology for systems capable of delivering a 500-kilogram payload 300 kilometers or more. Ukraine's entry into the MTCR will ease its participation in the global space market, which is dominated by the United States and other MTCR members who restrict their space cooperation with non-member states.

Ukraine's insistence on maintaining the right to produce offensive missiles had been a sticking point in negotiations with Washington about bringing Kyiv into the MTCR. (See ACT, April 1997.) As part of the March agreement, Ukraine will keep its hundreds of Scud missiles—the type of rocket MTCR was specifically designed to counter—through the end of their service lives, and will not forswear future production of short-range missiles should Kyiv find it necessary. When asked about Ukraine's Scuds, a State Department official said, "We've discussed their plans, and we're content their plans are compatible with MTCR membership."

This arrangement constitutes a major change in U.S. policy. To prevent the MTCR from becoming a missile technology "supermarket," the Clinton administration since 1993 had insisted that prospective member-states give up their offensive missile programs—except for the five nuclear weapon-states—as a condition for MTCR membership. As all MTCR decisions are made by consensus, Washington holds an effective veto over membership decisions.

Kyiv's commitment to end its nuclear commerce with Tehran was described by Albright as an act of "great statesmanship" and is expected by U.S. officials to delay the completion of Iran's 1,000-megawatt (electric) nuclear reactor project being completed by Russia at Bushehr. German-owned Siemens abandoned the project in 1979 following Iran's Islamic revolution. Russia signed a contract to install a VVER-1000-type reactor in January 1995. Ukraine's AOA Turboatom of Kharkiv was expected to provide a custom-built $45 million turbine for the $850 million light-water reactor project.

Moscow has said that it will produce the turbine itself from a plant near St. Petersburg, contradicting a U.S. official who said, "[N]obody else in the world makes them, such that they could be bought off the shelf for Bushehr." Moscow's assessment was shared by Ukrainian President Leonid Kuchma, who said at the signing ceremony for the nuclear accord that Russia would have no difficulty in building the turbines for Bushehr themselves.

Possibly responding to Washington's ongoing efforts to block progress on the Bushehr project, Georgy Kaurov, spokesman for Russia's Ministry of Atomic Energy, said on March 6 that Moscow had reached an agreement in principle with Tehran on building two additional reactors at Bushehr.

Despite Iran's membership in the nuclear Non-Proliferation Treaty (NPT), Washington believes Tehran is secretly trying to acquire nuclear weapons. Although NPT members in good standing are entitled to receive peaceful nuclear technology, the Clinton administration has sought to end other nations' civil nuclear commerce with Iran as a condition for nuclear cooperation with the United States.

In October 1997, Beijing agreed to end its nuclear dealings with Iran after finishing two projects of negligible proliferation concern. Moscow, however, while refusing to sell uranium enrichment technology to Iran, has maintained that civil power reactors pose no proliferation risk, and has rejected the Clinton administration's efforts to bring an end to its nuclear cooperation with Tehran.

At the signing ceremony for the U.S.-Ukrainian nuclear deal, Kuchma pointed out that the financial rewards of participation in international space launch projects such as "Sea Launch" and "Globalstar" will more than compensate for the loss of nuclear commerce with Iran. The two projects promise dozens of potential launch contracts for Ukraine's space industry, with each contract worth $40 million or more.

U.S. firms are also set to benefit from the agreements reached in Kyiv. In particular, General Electric has indicated its readiness to complete two Russian-origin nuclear reactors at Khmelnitskiy and Rivno. Finishing the two plants will cost $1.2 billion but will enable Ukraine to permanently close Chernobyl. Secretary Albright also pointed out that the nuclear cooperation agreement will open the way for Ukraine to diversify its options for purchasing nuclear reactor fuel.