DECLASSIFIED Authority ki 77 5 90 i - DEPARTMENT OF STATE ACTION MEMORANDUM as November 18 1975 SECRETZNODIS To The Secretary THROUGH The Deputy Secretary FROM EA Philip C Habib Winston Lord 'Kbrean'ReproceSsing'H The'Next Step The Problem Despite our representations seeking cancellation of the Korean contract to purchase a pilot reprocessing plant from France the RDKG plans to go ahead with the plant and has so advised the French The facility has the capability of producing enough weapons grade plu tonium for several nuclear bombs per year in the event the RDK abrogated its NPT and other safeguards obliga tions We are now faced with deciding whether to strengthen our opposition to the plant propose a mora- torium on its construction or accept the plant while seeking to minimize its risk through Special constraints There is renewed urgency in our dealing with Korean reprocessing due to indications that the ROKG is now go- ing ahead with its negotiations with the French At the same time French industrial representatives and Korean energy officials recently exchanged visits to discuss possible sales of nuclear reactors Although the French 'recently reconfirmed that they would not object to ROK cancellation of the contract and stated they would not hasten the pace of their dealings with the Koreans it is possible that the Koreans and French nevertheless will soon take steps to implement the contract 'IssueS'and'Options The attached paper Tab 1 presents and analyzes the relevant background issues and options which we believe should be carefully considered before we decide SECRET XGDS- 3 - Sig 1 Authorilywis l I 1 SECRETZNODIS -2 on the next step In brief working with other interested bureaus we have developed a broad range of options for our future course of action concerning the Korean reprocessing plant We can 1 accept the inevitability of the reproces- sing facility while seeking to minimise any risks through special constraints 2 approach President Park to seek a moratorium on construction of the plant with cu' without indicating to the that we understand ROK interest in eventual pursuit of a nuclear-weapons option 3 along with complementary approaches to Canada and France strengthen our opposition to a ROK nuclear reprocessing capability either to the Prime Minister or the President 4 in addition to Option 3 ask France to consider cancellation on an exceptional basis None of the options involve accepting the plant without proposing additive constraints They are inter- related and there are fallback possibilities should our initially chosen approach not succeed - Suggested Action g strongly favor strengthening 3 our opposition to the French plant Option 3 and believe that we should go back to the ROKG in an attempt to reverse its decision enlisting the Canadians who share our concerns in a parallel approach George Vest concurs in this basic stance Myron Kratzer also believes that we should make a further appeal to the ROKG but we draw your attention to the DES comments appearing later in this memorandum Under the proposed approach we would Repeat in your name our request for plant cancel- lation specifically warning the ROKG that going ahead will result in withdrawal of the Ex-Im request to Congress for $249 million in nuclear reactor credits for Kori-2 We would also confirm our intention not to authorize ROK reprocessing of US derived nuclear fuel and the ROKG that going ahead with the deal could seriously affect our future governmental nuclear cooperation with the RDK As you know we are on notice from the cognizant Congressional committees that prosPects for approval of the credits will be small unless the reprocessing plant is cancelled Moreover we continue to believe that the USG should alert the ROKG to the consequences of its actions for our nuclear relationship SECRETZNODIS r DE Baez 9 70 i -SECRET souls '37 continue to indicate to the RDKG the key importance of plant cancellation for sustaining our overall bilateral relationship and stability in the region reiterating the grave doubts of the ROK's peaceful nuclear intentions which an unjustified plutonium production facility will cause to ask Canada to undertake a complementary approach to the and inform France of our renewed efforts formally advise them of our firm conclusion that the ROKG has embarked on a covert program to develop a nuclear weapon and note the importance to our efforts of their continuing to refrain from early implementation of the contract pending resolution of the issue This approach does not envisage breach of existing contractual obligations e g fuel supply for Kori l and 2 complete cessation of private US nuclear commerce with Korea or threats to our political and security relationship Attached at Tab 2 are the main talking points which would be used in this approach The reasons for persevering are -- Despite its denials EA PM and INR remain convinced that the ROKG is seeking a nuclear weapons capability The Intelligence Community concluded over a year ago that South Korea at the specific instruction of President Park was embarked on a priority nuclear weapons development program There is no indication that President Park has modified his orders or that a major purpose for acquiring a pilot reproces- sing facility is not still to enhance the nuclear weapons effort -- In this connection acquisition of the pilot French plant would give the ROK a source of weapons grade plutonium in the event safeguards were abrogated -- we believe there is an element of bluff in the ROK position and we need to maintain our pressure in order to force the Koreans to fully face up to the risks of their present course of action The ROKG appears to believe that in the face of its strong resistance we will eventually back down and reverse our position - n- I - g- i 1 -4- -- Prevention of a Korean national reprocessing capability remains important to our ability to assure a cooperative bilateral relationship with the ROK not only in the nuclear energy but in the security and political areas as well Our proposed course of action takes into account the fact that US leverage is reduced to the extent that alternate sources of nuclear supply are available to the ROK - u -- Perseverance will maximize our chances of deferring or constraining a reprocessing facility if the ROKG should ultimately acquire one This is the minimum result which we should be willing to accept and present to Congress and other suppliers not just for its Korean implications but for its effect on our overall nuclear Cooperation and non-proliferation policies It follows from the above that while we continue strongly to prefer outright cancellation of the French plant an agreement by the parties concerned to delay acquisition for several years could ultimately be a satisfactory outcome if an impasse is reached on the next approach provided it does not imply US approval to proceed with the plant and certainly not with a nuclear weapons option at the end of the moratorium period Such a moratorium would offer Presi dent Park a face-saving way to back down while buying us time to engage the ROKG in a dialogue on its future nuclear energy needs in which we would offer to expand US assistance to Korea in non-sensitive nuclear ventures endeavor to diminish Korean nuclear weapons ambitions and divert their energy ambitions into multinational forms of cooperation for example a regional nuclear center located outside the peninsula Ambassador Sneider's recommended course of action is reflected in Option 2a and Tab B of the attached issues and- options paper seeking a moratorium on construction of the plant indicating to the ROKG that we understand its interest in the eventual pursuit of a nuclear weapons capa- bility For the strong reasons indicated in the paper we do not support a US approach that accepts such an ROK objective However as noted above we believe that an unconditional moratorium is a useful fallback position However there are differences on whether we should approach President Park at this time and whether to ask the French to cancel their contract DECLASSIFIED a Authority at-Lao i 7'0 i SECRET NODIS -5- EA Position g believes that we should not approach President Park directly in the first instance Rather we should pursue our request with the Prime Minister allowing President Park to reverse his decision or make a face-saving counter proposal without becoming directly involved at this time If this does not succeed we would then follow up with President Park directly EA recommends Option 4 that we additionally ask France to consider cancellation of the reprocessing plant sale informing the GDP of our willingness to risk our commercial nuclear relationship with the ROK along the lines of Option 3 because of our serious concerns It believes that there is nothing to be lost by such an approach and that since we have requested the recipient Korea to cancel we should at least make a parallel low-key request to the supplier France PM and EUR Positions agrees with EA's recommendation on the level of our appro an believes that Ambassador Sneider should be instructed to approach President Park in your name now to seek cancel- lation of the reprocessing plant along the lines of Option 3 Should Park still not agree to cancel the plant we would instruct Ambassador Sneider to propose in a follow-up approach to Park an unconditional five-year moratorium on Koran reprocessing PM is convinced that further approaches to officials below Park are unlikely to achieve our objective The strategy of giving Park room to reverse the decision gracefully by avoiding direct discussion with him has been tried twice and has failed Further approaches to lesser officials will probably be read by Park as further evidence that we are not sufficiently concerned to risk a direct appraoch further time will be lost during which the deal may be formally concluded making it even more difficult for Park to eventually cancel WhileS PM and EUR favor the complementary approach to France under Option 3 they believe that an explicit US request that France consider cancelling the deal would be ineffective and potentially damaging to our relations with the GOP for the reasons indicated in the issues and options paper SECRET ODIS -- n- nun - Ska AuthoritYpM Egg SECRET NODIS -5- CBS Position OES is not opposed to another appeal to the ROK OES believes however that in the event the ROK persists in its plan to acquire the reprocessing plant the special constraints called for in Option 1 would represent a reasonable and defensible compromise with Korea on this issue In particular the intensive US involvement in the plant as called for in this option would in the OES view represent an application of the multinational plant concept -- which we are now advocating -- not a departure from it Thus while favoring a further approach to the ROK OES does not agree that proceeding with the plant under the constraints of Option 1 represents a serious setback for US non- proliferation policy OES also does not believe that the special constraints in Option 1 would necessarily be inferior to a moratorium since the ROK can be expected to argue that it should be allowed to proceed on an unencumbered basis at the end of the moratorium period Furthermore in assessing the desired future course of US action OES believes it has to be recognized that there is some ambiguity in our precise knowledge as to what the Koreans are up to in the nuclear military field It may be likely that the ROK is intent on acquiring a weapon as soon as possible but it also appears possible that the decision to acquire a weapon may not have been firmly taken and that the ROK is essentially developing a contingent military capability for possible activation at a later time Given this ambiguity OES believes there is a serious question as to how far we can legitimately go in pressing Korea -- an NPT party -- to abandon a small reprocessing plant which on its face is not inconsistent with legitimate peaceful nuclear intentions INR wishes to underscore the Intelligence Community' 3 judgment that the ROK is embarked on a nuclear weapons development program whose goal may be either fabrication of a nuclear device or the capability to produce one on short notice EA and PM share this assessment see many disadvantages in accepting the plant under constraints and cannot recommend this alternative as a fallback In this connection it should be noted that regardless of whether the ROK intent at this time is actually to fabricate a nuclear weapon acquisition of the reprocessing facility is essential for a nuclear weapons capability SECRET ODIS - 'AulhoriWW 3% 10 - Dam a - SECRETZNODIS -71 There has been strong interagency interest in the Korean reprocessing problem Up to now ACDA DOD and ERDA have all favored strong US opposition to ROK acquisition of a national reprocessing facility and we would anticipate that there would be interagency support for continuing our - opposition we will shortly share our issues and options paper with other agencies After we receive your guidance on the preferred option we propose to clear with them an instruction cable reflecting your preferred course of action If they favor substantive revisions in the proposed approach we will of course come back to you so that you may decide upon the most appropriate means of resolving any differences Recommendations 1 That you approve Option 3 and the Talking Points at Tab 2 along with complementary approaches to Canada and France strengthen our opposition to a ROK nuclear reproces- sing capability along the lines indicated above in an approach to the Prime Minister followed by an approach to President Park if the initial approach fails favored by EA and Approve Uisapprove in an approach to President Park in the first instance favored by PM Approve Disapprove 2 Additionall that you approve as a fallback implementation of Option 2b a fiVe-year moratorium if the RDKG reaction to the request for cancellation is negative favored by EA and PM Approve Disapprove 3 Additionally that you approve Option 4 ask France to consider cancellation on an exceptional basis favored by EA only Approve Disapprove SECRETZEODIS g ISECLASSIFIED i I 12 32 NOD IS 4 Alternatively if you do not approve the above that you approve Option I accept the plant while seeking special constraints Approve Disapprove Attachments Tab 1 - Issues and Options Paper Tab 2 - Proposed Talking Points Drafted 11 18 753x29330 x28986 x28995 Clearances PM - Mr vest OES - Mr Kratzer EUR Mr Hartman INR - Mr Kirk - ECLASSIFIED j ho AuthorIWVM 1 Dateg SECRETZNODIS KOREAN REPROCESSING ISSUES AND OPTIONS Background We have compTeted the second round of our efforts to deter the RDKG from acquiring a nationai reprocessing Ambassador Sneider has approached the ROKG up to the Deputy Prime Minister TeveT and the Deputy Secretary of State has caTTed in the Korean Ambassador In these approaches we vigorousTy sought to persuade the ROKG to cancei the contract to purchase a piTot reprocessing faciTity from France Tab A On October 23 Acting Foreign Minister Lho Shin Young informed Ambassador Sneider that the RDKG had decided it woqu be impossibTe to canceT the contract'at this stage Tab Lho again emphasized that the p1ant was intended for study purposes onTy and welcomed US inSpection He asked why we had not resisted Japanese acquisition of reprocessing faciTities and why we seemed so suspicious of Korea's intentions Ambassador Sneider expressed our deep disappointment with'the RDKG response' and reviewed our arguments against the p1ant He urged reconsideration of the decision to proceed and expressed doubts about our abi1ity to continue to cooperate with Korea in the nucTear energy area if the ROKG adheres to its course The ROKG has maintained the same formaT position conveyed to us earTier -- it p1ans to proceed with its reprocessing deaT but is wi11ing to accept some form of US inspection We have had reports that the RDKG was internaTTy divided on whether to continue with the p1ant in the face SECRETZNODIS DECLASSIFIED Authorizyg iigf a I -2- of our objections and we know that Ambassador Hahm warned his Government of the broader risks to our bilateral relationship entailed by the French contract However it is clear that President Park was directly involved in the decision to reject our approach and subordinate officials are showing few signs of disagreement There is renewed urgency in our dealing with Korean reprocessing due to indications that the ROKG is now going ahead with its negotiations with the French The French had earlier agreed to acquiesce in ROK cancellation of the plant contract and recently indicated to us that they would not hasten the pace of negotiations Nevertheless it is quite possible that the Koreans and the French will shortly initial letters of understanding covering the sale Further French industrial representatives and Korean energy officials recently exchanged visits to discuss possible sales of two nuclear reactors to Korea raising the prospect of broadened French nuclear cooperation with the ROKG which could further complicate our efforts to stall the reprocessing plant and could displace projected US sales of the Kori-5 and 6 and perhaps the Kori-2 nuclear reactors - In deciding to persist we believe that President Park and his advisers were influenced by the following considerations A desire to be prepared to exercise a nuclear weapons option in the future given ROKG uncertainties over the long-term durability of the US defense commitment with its associated nuclear guarantees An apparent conviction that nuclear suppliers other than the US are readily available and the hape that the US will sooner or later reverse its position and provide loans for nuclear power plants for Korea ECLASSIFIED Autho 13% '1 SECRETZNODIS NARA Dal i g -3- A tendency to exaggerate the potential economic and technical benefits of reprocessing for the ambitious ROKG nuclear energy development program exacerbated by resentment at what the Koreans perceive as discriminatory treatment compared with Japan Basic Issues Our course of action on the reprocessing issue could have critical bearing on our bilateral relationship with the ROK our relations with other nuclear suppliers and our general nuclear cooperation policy The relationship For the moment the ROK appears to believe that we are bluffing and will eventually acquiesce in the French plant In so doing they may be willing to run substantial risks to our bilateral relations and may have underestimated the potential costs which pursuit of a nuclear option would entail Their continuing resistance to our approaches reinforces suspicions of their nuclear intentions and indicates the extent to which they may go to establish a security option independent of the US The ROKG may thus be gambling that it can successfully resist US pressure against a national reprocessing capability and avoid major damage to continued nuclear energy cooperation with the US An alternative possibility is that e ROKG recognizes the strength of US opposition but is determined to proceed come what may assuming in any event that it can shift its nuclear business elsewhere In this View the ROKG firmly intends to perform its own commercial reprocessing at some later stage with energy independence motivations overriding the political economic and technical drawbacks of the enterprise SECRETZNODIS DECLASSIFIED - '1 3 -4- It is now clear that continuation of our opposition to the French plant will require a tougher position by us if we are to eventually dissuade -- or at least substantially impede -- the ROK from completing the deal Given the strong ROK desire to acquire the 'essential_step in its development of a_nuclear weapons capability there will undoubtedly be an element of strong ROK dissatisfaction should we eventually succeed in deterring the plant Should we acquiesce in or fail to deter a ROK national reprocessing capability we will have to adjust to the unsettling consequences that a ROK capability to produce weapons grade plutonium will have for our bilateral relations and in the region Because of our close security relationship with the ROK we will probably be seen as having a special responsibility for insuring that the reprocessing plant and derived technology are not used by the ROK for military purposes We are likely to have difficulty in justifying continued peacerl nuclear cooperation with the ROK to a skeptical Congress Furthermore should it become widely believed that the ROK is determined to develop its own nuclear weapons this perception will adversely affect our ability to maintain support for our overall security policies in Korea The ROKG would be likely to view US acquiescence as a possible signal of inadequate US resolution to prevent it from developing its nuclear weapons option over time This would complicate our relations with the PRC and Japan and inhibit our ability to work out stable long term arrangements on the Korean peninsula SECRETZNODIS CLASSIFIED or AuthorityHM lemma Dal I -5- 0n the-other hand it can be argued that if we were able to very carefully and closely constrain the plant s operations through the adoption of a special new battery of constraints including US inspections we might be able to materially alleviate many of these concerns In connection with the above the Intelligence Community concluded over a year ago that South Korea at the specific instruction of President Park was embarked on a priority nuclear weapons development program The evidence since then continues to indicate that the goal remains either fabrication of a nuclear device or the capability to produce one on short notice but that South Korean officials involved in the program have become_sobereg by the obstacles to success There is no indication however that President Park has modified his orders or that acquisition of a pilot reprocessing facility is not still intended at least in part to enhance the nuclear weapons effort Failure to acquire that facility on the other hand would undoubtedly be viewed in South Korea as a major blow to the program and therefore instrumental in discouraging further pursuit of that program on a priority basis - Relations with other nuclear suppliers Canada and France are generally aware of'our efforts to turn off the ROK reprocessing deal While taking no initiatives of their own the French agreed not to stand in the way of our approach and not to hasten the pace of the Korean French deal The Canadians share our concerns over potential proliferation dangers in Korea have negotiated with the ROK a Canadian veto right over ROK reprocessing of fuel from Canadian reactors but have not yet requested directly Korean cancellation of the reprocessing deal In the supplier discussions in London the seven participants have agreed to observe SECRETZNODIS Authorilypp' 15599 - B mm Balsa le 75 special restraint in sensitive nuclear exports such as reprocessing and to encourage multinational alternatives to such exports particularly to areas of instability ROK acquisition of a reprocessing plant in the wake of Brazilian and likely Pakistani acquisitions could cast doubts on the meaning and value of these provisions and may weaken the fragile multilateral consensus behind a degree of restraint in sensitive nuclear exports 0n the other hand we could explain the new suppliers' policy as being prospective rather than retroactive in effect Moreover in the event of ROK acceptance of additional constraints on the reprocessing facility we could represent these as consistent with both the nuclear export guidelines in London and the US concept of special controls on sensitive exports Our non-proliferation policy and domestic support for our peaceful nuclear program The US is clearly on record as opposing proliferation of national reprocessing facilities and favoring instead the establishment of multinational regional nuclear centers This position has received strong press and Congressional support following attacks from both quarters on the FRG Brazil nuclear deal US inability to give substance to this position particularly in the case of a close ally such as Korea could be expected to reflect negatively on our nuclear export policy in general and to result in adverse press and Congressional criticism It can however be argued that such criticism might be alleviated if the USS could portray supplementary constraints on the Korean facility as effective barriers to its being used to support mealtime thorium 77552 - cat ifle a nuclear weapons program and as essentially internationalizing the facility through continuing US involvement - Stri gent nuclear export guidelines including US opposition to national reprocessing ambitions have played a significant role in denying US reactor manufacturers the Brazilian export market and may constrain future US nuclear cooperation with Iran unless a mutually acceptable compromise can be achieved This is seen by some as a self-defeating policy which has led to the loss of US nonw proliferation leverage as well as economic losses A major theme recurring in Iranian Korean and Brazilian statements moreover is their economic right to a complete nuclear energy capability under IAEA safeguards and their resentment of efforts to deny them access to the full spectrum of peacefbl nuclear technology Iran and Korea have underlined in addition their acceptance of comprehensive IAEA safeguards as a result of their adherence to the NPT which had led many to eXpect that such access would in fact be facilitated following ratification The position of these nations vis a vis the US has been strengthened by the availability of alternative soppliers principally France and the FRG 'with fewer I inhibitions regarding sensitive nuclear exports Finally approximately fifteen NNHS either have small reprocessing facilities or have declared an intention to proceed in this manner including Argentina Brazil Iran and Pakistan In considering the above factors however we must take into account the unique situation we face in Korea given our intelligence indications regarding nuclear weapons development In addition given Korea's strategic location ROK possession of a nuclear weapons potential would threaten the military balance on the peninsula directly and ad- versely affect the PRC USSR and Japan Given our own deep involvement the other great powers would expect the USE to exercise a restraining hand CLASSIFIED DE Authority ll SECRETZ NODI I Dal I The effect of the reprocessing p1ant on Japan shouid aiso be considered Consumation of the ROK French dea'l cou'ld impair GOJ support for a multinationa nuclear center in the Far East cast addi- tional Japanese doubt on our non proiiferation strategy and possibiy reduce the chances for Japanese ratification of the NPT Such a negative impact may be mitigated however by overriding Japanese non-proiiferation interests and the fact that Japan has nationa reprocessing Qf_its own Options There is a range of options for deciding our position with respect to the Korean reprocessing p1ant These are 1 Accept the of the reprocessing seeking to minimize its risks through specia constraints 23 Approach President Park to seek a two- or three-year moratorium on construction of the p1ant indicating to the ROKG that we understand ROK interest in eventuai pursuit of a nuciear weapons option 2b Approach President Park aiong the 1ines of Option 2a but with a five-year moratorium proposa and without commenting on Korea's future nuciear weapons option 3 Aiong_nith compiementarv approaches to Canada and France - strengthen our opposition to a ROK nuciear reprocessing capability SECRET NODIS AuthoriWI'M I 17 599 ll Datcg I I 4 In addition to Option 3 ask France to consider cancellation on an exceptional basis None of the options involve accepting the plant without proposing additive constraints They are interrelated and there are fallback possibilities should the initially chosen approach not succeed Option 1 Accept the inevitability of the reprocessing facility seeking to minimize its risks through special constraints In addition to accepting the Korean offer of US inspection and seeking other constraints we would seek to secure Canadian and French support for such arrangements If the ROKG agrees to our proposed constraints we would activate the Ex Im request for Congressional approval of $249 million in nuclear reactor credits This option assumes that the ROK decision is irreversible or that the leverage we would have to use to overturn it would excessively damage our bilateral relationship with the ROK We could seek the following constraints from the ROKG as a compromise package US right of unimpeded access to the reprocessing plant during both the construction and operations stages to be suspended at our option in the event of satisfactory continuous involvement by France as the supplier US rights to purchase any plutonium for recycling in Korea only in the form of fabricated fuel rods and Authority 9g - 1 - Dalcg E L 1 0- limitations on ROK plutonium processing and accumulation in keeping with Korean assertions that the plant is only for research and training and not for production purposes To avoid creating the impression that we are duplicating or questioning the efficacy of the IAEA safeguards system we would avoid the term inspection He would endeavor to involve France as the responsible supplier a possibility mentioned briefly by the French in the context of London discussions of supplier involvement in sensitive nuclear facilities but we would retain US access rights whether or not France accepts this responsibility If however the Koreans completely reject one or more of the preposed constraints the package could be seriously weakened and we would have to reconsider our peaceful nuclear cooperation as a whole As part'of our approach we would engage the ROK in discussions of its future peaceful nuclear energy needs in an effort to deter Korea from any expansion of its national reprocessing capability He would attempt to find ways for the ROK to obtain commercial reprocessing services elsewhere preferably through ROK participation in a multinational regional plant - Pros When combined these additive restraints would significantly constrain ROK freedom of action US and or French involvement could be seen as changing the character of the Korean facility from a national to an international one as an application of the US policy favoring multinational reprocessing ventures mu - 77592 Authority%a 3 -NARA a I -11- -- Supplier involvement or monitoring would reflect our preference for additive controls on sensitive facilities Taken together these conditions might help to ameliorate Congressional concerns although we can still expect strong criticism Eggs -- Even with additive constraints we would be permitting a plutonium-producing facility in a sensitive country with nuclear weapons aspirations US inspection could serve to place us in the awkward position of vouching for the continued peaceful character of the ROK program about which we have serious concerns it could also undermine general confidence in the IAEA system -- There may be domestic US resistance in Congress and the NRC to storing Korean plutonium or returning it in any fonn to the ROKG Even under these constraints the facility would have a disturbing effect on Japan and on that country's support for a multinational nuclear center -- There are risks that the Koreans might selectively oppose the more important constraints plutonium production and storage limitations or that even with a Korean request France might balk at either accepting US inspectors or accepting the involvement themselves It should be recalled that our arrangement to inspect the Israeli reactor at Dimona was significantly weakened by Israeli constraints and we eventually abandoned our inspections rather than remain in any way associated with the use of that reactor 0n the other hand the Dimona inspections were ad has affairs arranged after the fact SECRETZNODIS i SECRETZNODIS Authority Mg 31 2 Dalg Z e -- The ROKG would not be prevented from abrogating the constraints at some future point and acquiring sufficient plutonium for a nuclear weapon _although a continued US presence and defense commitment could__ serve to deter it from doing so This would mean that an indefinite U S military presence could be hostage to the ROK as the price for not exercising its nuclear option Option 2a Approach President Park to seek a two- or three-year moratorium on construction of the plant indicating to the ROKG that we understand ROK interest in eventual pursuit of a nuclear weapons option Ambassador Sneider would be authorized to discuss the reprocessing problem directly with President Park We would express our deep concerns regarding any possible nuclear weapons development and request the ROKG to delay acquisition of the French plant for two or three years At the same time Ambassador Sneider would at least implicitly acknowledge that such a moratorium would not foreclose a nuclear weapons option in the future Although he has made the final decisions to reject our previous requests Park has thus far remained personally removed from the discussions on this issue In this approach which is recommended by Ambassador Sneider we would involve President Park directly and attempt to deal with his longer-term security concerns We would note our own conviction that the ROK is -- and will continue to be -- in a strong security position vis-a vis North Korea While we see no need for great concern we would note to Park that if he is worried about the withdrawal of US nuclear protection from Korea which we do not anticipate we would be willing to discuss this contingency with him At the same time the SECRETZNODIS DECLAssuaau - 533mm tB '13- Ambassador wouid make clear that our overaii relations as weii as our to support ROK nuciear power deveiopment wi11 be impaired if he goes ahead with the reprocessing p1ant at this time We wouid emphasize to Park that his agreement to a moratorium shouid permit an expanding fiow of technica and economic benefits from the US in the nuciear area and couid reverse the present situation in which our nuciear cooperation with the ROK is jeoparadized by the purchase of the French reprocessing piant We wouid express readiness to consider training opportunities for ROK technicians in the nuciear energy fieid and reiterate our interest in supporting a muitinationai regiona reprocessing center with ROKG participation -- If we couid obtain ROKG agreement to a moratorium of two-to- three years we wouid demonstrate success to Congress and other suppiiers in at 1east deterring the introduction of a sensitive reprocessing in Korea consistent with our non-proiiferation poiicy -- A moratorium wouid add to the time needed for the ROKG to acquire a seif contained weapons better enabie us to continue to assist Korea in Obtaining reactors and fuei and buy time to invoive the ROK in our regionai mu1tinationa1 reprocessing propose -- It would offer President Park a way to avoid having to back down compieteiy by reversing his decision to go ahead with the piant Whiie Park might sti11 refuse to aiter his position and accept a moratorium there is reason to beiieve that this particuiar approach i gnaw Dmg I - 1B SECRETZNODIS -14- couid appea to him since he wouid be assured of a continuing US nuciear umbreiia as we11 as impiicit US acceptance of his efforts to deveiop a nuciear weapons option Egg -- In order to heip persuade President Park to agree to a moratorium this approach presumes our to indicate to him our understanding that the ROK may wish to pursue a nuciear weapons Option at some future date Any such indication wouid seem to condone the Korean weapons pian and wouid be contrary to the spirit if not the 1etter of our obiigations under the NPT -- This approach couid make it difficuit for us to oppose the reprocessing p1ant and to question Korea's weapons ambitions at a iater stage and open us up to biackmaii in terms of withdrawais of US forces from Korea -- By in effect appearing to acquiesce in any eventuai ROK nuciear weapons ambitions we would invite the ROKG to eventually-press us-to assist it with reprocessing as we11 as with other nuciear technoiogy and medium range missiie deveiopment -- He wouid be acqni scing'imp1icit1y in the eventua acquisition of nuciear weapons by a country in a most sensitive region directiy impacting on our reiations with the PRC the USSR and Japan and introducing an unsettiing new eiement into the equation in Korea If this position became known it couid have extremeiy serious effects in Northeast Asia as we11 as adverse effects on our non-proiiferation efforts woridwide Authority 7 I gar-w we 9 i - 3 -15- -- It would be difficult to persuade Congress to approve the reactor export credits essential to a continued close cooperative association with the ROK in its nuclear energy development program in the absence of firm indications that the plans for a reprocessing plant have been dropped entirely or at least that we have significantly constrained the facility thion 2b Approach President Park along the lines of Option 2a but with a five year moratorium proposal and without commenting on Korea's future nuclear weapons option This approach would appeal directly to Park to find a way to break the impasse by agreeing to deter the reprocessing plant for five years until 1980 Ambassador Sneider would reiterate our concerns and propose a moratorium as a means of temporarily alleviating these concerns thereby avoiding any major disruption of US- Korean relations in the near term and facilitating transfers of US reactors and fuel We would suggest to Park that we review the situation in a few years taking account of actual progress toward a multinational regional plant updated information on the economics and technology of reprocessing and recycling Korea's comnercial reprocessing needs and whether such needs could be satisfied through US or other services should a multinational plant not yet be established We would offer to discuss nuclear fuel cycle issues with the ROKG and'konsider providing training for Korean technicians in non sensitive areas While it could be surfaced in the next round this approach or a subsequent offer of a two-to-three year moratorium might serve as a possible fallback to thion 'i if President Park still refuses to cancel the contract $519 Authorityp u 39510 i Bgfnam Dal -16- There is a risk that Park may respond to an approach of this kind by saying he is willing to cancel Korea's reprocessing'program for the period of the moratorium but only in light of the extraordinary pressures the US has brought to bear on this issue and on the clear understanding that after the moratorium period the US would interpose no further objection to a Korean reprocessing program under full IAEA safeguards should the ROK at that time elect to proceed To accept such a condition would permit Park to proceed unhindered with a reprocessing option after the moratorium period and would give him the fruits of full US civil nuclear cooperation during the interim To refuse the condition would permit Park to argue that he had done everything possible to meet our demands short of agreeing unconditionally and indefinitely to foreclose Korean entry into the reprocessing field P_res_ -- This approach would avoid the serious risks inherent in any direct or indirect US legitimization of an ROKG nuclear weapons program -- If successfulg-it would have the same non-proliferation benefits as Option 2a It would also provide the 65 an Opportunity to diminish longer-term Korean interest in a nuclear weapons option At a minimum ROKG acceptance of such a moratorium would probably mean that a nuclear weapon might not be available to the ROK until the mid-1980's rather than the early 198015 -- A straight moratorium could give Park a face-saving way of avoiding the potentially serious consequences for US nuclear cooperation and overall US-Korean relations of continuing to insist on acquiring the plant on schedule SECRETZNODIS We Amharm igg f SECRETZNODIS 17- l-r-I _1n- n -- Rather than risk a premature disruption of the US security commitment by acquiring the reprocessing piant now Park might decide that deiay cou1d u1timate1y serve his interests by minimizing US anxieties unti Korea's own security programs are further deveioped Eggs The main difficu1ty with this approach is its acceptabi1ity to Park Without acknowiedging the 1egitimacy of a Korean nuciear weapons option Park's incentive to agree to this compromise would be reduced since he wouid fear that an essentia e1ement of his weapons p1ans w111 be de1ayed and perhaps 1ost comp1ete1y A five-year moratorium wou1d cause a severe setback if Park wished to exercise a weapons Option in the ear1y 1980's For these reasons direct confrontation with Park even offering a five-year moratorium compromise cou1d 1ead to a situation in which Park becomes more committed to the project offers the US comprehensive inspection rights and reiterates ROK peacefu assurances Aiternativeiy Park cou1d demand'thah the US guarantee support of the p1ant when the I moratorium 1apses -- The ROKG cou1d work out an arrangement with France to de1ay contract imp1ementation fee1ing confident that US opposition might we11 diminish in a few years that progress on regional centers wouid not be substantia and that the US probabiy not succeed in deterring other countries from acquiring nationa reprocessing faci1ities - a -- - - SECRETZNODIS Authorityw 5 SECRETLNODIS 31 EA 0111579570 I I3 -NA lB- Option 3 Strengthen our opposition to a ROK nuclear reprocessing We would concurrently seek Canadian and French assistance in dissuading the ROKG - - In further discussions with the ROKG we would Strongly request ROKG reconsideration of its position pointing out that it will seriously impair our ability to continue to cooperate with the ROK in the nuclear energy area Clearly convey that Korean plutonium production lacking any commercial justification will raise grave doubts as to ROK peaceful nuclear intentions This would inevitably affect our ability to sustain our overall bilateral relationship and stability in the region -- Forewarn the ROKG that a refusal to alter its decision to proceed would lead the USE to withdraw its request to Congress for Kori-2 nuclear reactor credits In addition we would confirm our intention not to authorize RQK national reprocessing of US -deri0ed nuclear fuel and would inform them that going ahead could seriously affect'our future governmental assistance to the ROK -- R iterate formal US support for safer and more economic regional alternatives to meeting long-term reprocessing needs and more economically important opportunities such as low-enriched fuel fabrication where Korea would enhance its energy independence and commercial position in a much less unsettling manner The option would be implemented in both Washington and Seoul Ambassador Sneider could either approach President Park in the first instance or approach the Prime Minister prior to going to Park UPtlonS and 2 re- present possible fallbacks from Option 3 WWSSIFIED mama 1222- i SECRETLNODIS I 9_ This approach does gt_involve breach of existing contractual obligations fuel supply for Kori-l and'Z complete cessation 0f private U5 nuclear commerce with Korea or threats to our political and security relationship It gg _warn the ROKG of the bearing of its proposed facility on use nuclear assistance credits and intergovernmental cooperation including training on our ability to sustain our overall relationship and on stability in the region We would brief Canada on our position and request that the GOC undertake a complementary approach to dissuade the ROKG from continuing with the plant As the supplier of Kori-3 and 4 Canada has secured veto rights over the reprocessing of its spent fuel has supported our efforts to prevent Korean acquisition of the plant and may well be prepared to condition future nuclear reactor credits on a reversal of the ROKG decision The Kori-3 deal is not yet final and the Canadians might be influenced to hold this up in approaching the French we would indicate that we are_persever1n9 in our-efforts to persuade Korea to forego the reprocessing plant and- formally advise them of our firm conclusion that the ROKG has embarked on a covert program to develop a nuclear weapon we would note the importance of our efforts of their continuing to refrain from early implementation of the contract pending resolution of the issue -- In the event of ROKG agreement we would demonstrate success in deferring a plutonium-producing facility in Korea for which we bear a special political and security responsibility SECRETZNODIS I AuthoriWEE mFi f SECRETZNODIS gfm DB s f I -20- The ROKG would be on clear notice that the US is opposed to its developing a nuclear weapons option and is prepared to take actions to give substance to its opposition -- Choice of this option would be predicated on the assessment that_ the US must continue to oppose this indispensable element in the covert ROK nuclear weapons program and that President Park who has not committed himself publicly or to us regarding the plant may ultimately reverse the ROK position in the face of continued US opposition -- By clearly warning that the KORI-Z credits will be withdrawn and indicating that going ahead with the plant could seriously affect our future governmental nuclear cooperation not breaching existing contracts we would go_beyond our previous approaches in stressing the seriousness of our concerns -- Perseverance will maximize our chances of deferring or con- straining a reprocessing facility if the ROKG should ultimately acquire one Egg -- Continuing-our opposition to a Korean national reprocessing capability could lead to a major bilateral disagreement More so than under Options 2a and 2b the ROK might strongly argue that as an NPT party it has not only foresworn nuclear weapons but also is entitled to a reprocessing cabability under Article IV of the Treaty which it could accuse the US of violating -- The Koreans would be given still greater incentive to turn toward the French and others as nuclear suppliers thus possibly SECRET NODIS CLASSIFIED DE Authority p I SECRETZNODIS Dal-5 '21- denying us opportunities to impose special US constraints as well as possibly losing a promising lucrative commercial market In particular denial of US nuclear export credits could enhance the commercial position of alternative suppliers -- Without a full explanation of our unwillingness to assist Korea's peaceful nuclear program our credibility as an international supplier could suffer and we could not publicly discuss the intelligence basis for our concerns and actions although our actions would probably speak for themselves All of the above arguments have been made repeatedly to the ROK and the final Korean response may remain the same unless we pull out all stops to overturn the ROKG decision perhaps involving a direct approach to President Park under Options 2 or 3 Option 4 In addition to Option 3 ask France to consider cancellation on an exceptional basis Under this option we would supplement the complementary approach to the French under Option 3 by asking the GOF to consider cancellation of the reprocessing project given the extraordinary sensitivity of its acquiring a nuclear weapons capability both for the stability of the region and for the policies of the major powers with interests in the Korean peninsula To be effective we would also tell the French we have decided to risk our commercial nuclear relationship with the ROK as outlined in Option 3 because of our concern we would have to make clear the main purpose of our request which is related solely to prevention of the reprocessing plant and is not designed to blOck French sales of reactors to Korea or Authority m '1 SECRETZNODIS Dam I -22- We would reiterate our support of non-sensitive nuclear cooperation with the ROK and a multinational regional nuclear center in the Far East in which France could play a major role Eggs There are intelligence and diplomatic indications that elements in the French Government are increasingly disquieted about the destabilizing implications of the Korean reprocessing contract Such-concerns have already led to French acquiescence in the US approach to the ROKG The French would undoubtedly be shaken by any convincing intelligence we can now produce and might readily accept a suggestion that they review the matter anew Increased French apprehensions may lead to a decision to cancel possibly in the context of negotiating contracts for more lucrative and less sensitive nuclear reactors and low-enriched fuel fabrication facilities The GOP may conceivably prove amenable to such a direct approach which would be consistent with our multilateral understanding in London to consult with interested suppliers on sensitive nuclear export cases In the absence of a US demarche but for diplomatic and strategic considerations the GOF quashed a reprocessing deal with Taiwan and opposes reprocessing exports to Egypt and probably Israel We have not yet gone beyond seeking French acquiescence in our approach in contrast to the pressures applied to the Koreans Even if France declines to Eb onsiggf its deal it may be important for the USE to have developed a record of strong representations to both SUpplier and recipient Authorityw i - SECRET NODIS - 393 _23_ Cons -- France has already taken into account the relevant political and strategic factors even though it may not have complete intelligence as to the covert ROK program France takes the general position that proper safeguards can be relied upon to deter diversion of sensitive items It has negotiated a tight trilateral safeguards agreement with Korea covering transfers of reactors as well as the reprocessing plant and related technology and might find it difficult to renege on its commit- ments -- The US has made its views known to the French and it could be argued that we would be unlikely to have further impact on the French position that the GOF would balk at acting as a US stalking horse with the ROKG and that a US request to France to cancel would be perceived by the French as revealing serious US diplomatic weakness particularly our inability to step the introduction of sensitive plants in a country which continues to depend so much on US support France undoubtedly sees a connection between current Korean interest in French reactors and the French reprocessing plant If the plant goes fbrward US reactor assistance would be endangered and France would not be likely to deny the ROKG the right to reprocess fuel from French reactors in the French supplied facility A GOF initiative to cancel the reprocessing plant would therefore risk French loss of reactor sales to Korea SECRET NODIS DECLASSIFIED AuthoriWM-ag SECRET NODIS I Dateg _24_ This option calls on the French to accomplish a US objective which we have not yet brought about in a country where our political interests and influence are vastly greater than France's on the basis of a US as- sessment of ROK intentions which we are unwilling to document because of the sensitivity of the intelligence information Drafted JHKalicki JHKahan JDForbes kts ll l5-75 x28986 Concurrences - Mr Lord EA - Mr Habib PM - Mr Vest 0E5 Mr Kratzer INR - Mr Kirk Attachments Tab A - State 226011 and 240692 Seoul 7642 Tab Seoul 8278 and 8458 SECRET NODIS i TAB 2 u ARA Delegw- I Authority SECRET NODIS Proposed Talking Points -- My Government has made several representations expressing the - deep US concern about the potential negative effects on our mutual interests of a Korean decision to acquire a national reprocessing facility We have given serious consideration to your Government's response to our prior approaches Speaking as long time friends we wish to restate our views because we attach such importance to re- solving this problem and we wiSh to be absolutely sure there is no misunderstanding of our position 7 As you are undoubtedly aware a perception that Korea was in a position to produce and separate plutonium independently could seriously affect our political and security relationships and have unsettling repercussions in the region Nhile we welcome your assurances that Korea will live up to its NPT obligations we are seriously concerned that acquisition of a national reprocessing facility even one restricted to experimental uses and appropriately safeguarded will reinforce doubts about ROK nuclear intentions given its inherent ability to produce material directly usable in nuclear explosives This is all the more true since in our judgment national commercial plutonium reprocessing and recycling makes little commercial sense for a country like the ROK and promises marginal economic benefits compared with other energy investment -- Because of this conclusion Secretary Kissinger has instructed that I reiterate our strong request that you not proceed with your reprocessing and related plutonium projects under your French contract SECRET NODIS Authority 71590 I ECLASSIFIED SECRET NODIS - 2 - As I noted previously the USE fully recognizes Korea's desire to re duce its dependence on foreign energy sources and the central impor- tance of Korea's civil nuclear program to this effect My Government has firmly supported this program and we wish to continue as well as - to expand our assistance We also wish to broaden our cooperation with the ROK in other scientific areas -- I have described to your Government the ways in which the US would be prepared to enhance Korea's energy independence and commercial position in a less sensitive and we believe more economic and efficient manner These include low-enriched fuel fabrication increased access to non-sensitive nuclear technology commensurate training opportunities for Korean scientists enrichment and reprocessing services and support of Korean interests in a multinational plant-in the Far East -- I must now inform you however that if you decide to proceed with your proposed reprocessing plant my Government would have to with draw its request to Congress for $249 million in nuclear reactor credits for Kori-2 We must also confirm our inability to authorize national ROK reprocessing of US-derived nuclear fuel and infonm you that going I ahead with the plant could seriously affect our future government nuclear cooperation -- He strongly wish to avoid this unfortunate result We earnestly hope that you will share our judgment that cancellation of this small facility will be in the best interest not only of our overall bilateral relationship but of stability in this region as a whole SECRET NODIS n Anthem 51 'nm - Department of State TELEGRAM SECRET AN PAGE 01 STATE 283167 TOSEC 230055 62 ORIGIN NODS-OO INFO OCT-01 ISO-00 I001 DRAFTED BY APPROVED BY SIS -REHOODS 0200312 DEC 75 ZFFH EH SECSTATE UASHDC TO USDEL SECRETARY PRIORITY 5 STATE 283167 TOSEC 230055 NODIS E O 116523605-3 TAGS NNUC PARH KS SUBJECT KOREAN REPROCESSING FOR HABIB AND LORD HITH THE PARTY FRON NILLER AND BARTHOLONEH 1 THE SECRETARY HAS APPROVED OUR RECOMMENDATION TO APPROACH ROK PRIME MINISTER AND IF NECESSARY PRESIDENT PARK HITH STRENGTHENED OPPOSITION TO REPROCESSING PLANT AS HELL AS CONPLEHENTARY APPROACHES TO CANADA AND FRANCE OPTION ONE A OF YOUR JOINT NEHORANDUH HITH REGARD TO OTHER OPTIONS 5 5 NORATORIUH SECRETARY A5KED THAT YOU SEE HIM AFTER COMPLETING APPROACHES UNDER OPTION ONE A 2 INSTRUCTION CABLE NON BEING CLEARED ASAP HITH OTHER AGENCIES FOLLOHING CLEARANCE HE HILL PROCEED HITH APPROACH IN SEOUL AND HILL RECOMMEND TO DEPUTY SECRETARY THAT HE CALL IN CANADIAN AND FRENCH AHEASSAOORS INGERSOLL SECRET This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu