Korea-US Nuclear Power Talks Hinge on Westinghouse Stake and Technology Usage Rights
Of the funds pledged under the Korea-US investment agreement, 60% is expected to be directed toward nuclear power, with the final agreement reportedly specifying construction of 8 reactors and a signing possible as early as September 18. Both the AP1000 and APR1400 reactor models are under review, with whether the Korean-model reactor is actually adopted cited as the key variable determining the scale of benefit to related stocks.
When the US previously transferred nuclear technology to Korea, it retained an intellectual property clause requiring US approval for overseas exports, but Korea, after roughly 50 years of independent development, now asserts its nuclear technology as proprietary. This clause has repeatedly caused the US to block Korean export negotiations with European countries such as the Czech Republic and Poland, and in the current talks a compromise is being sought through specific terms such as royalty payments and work allocation.
From Korea's standpoint, securing a stake in Westinghouse along with technology usage rights sufficient to allow management participation was cited as a key objective. This would let Korea build a track record for its reactor model in the US market and resolve the contractual constraints that have hampered its access to global markets. JPMorgan assessed that a deal is likely given the alignment of interests between the two countries, while noting that the timing of an agreement remains uncertain.
During the discussions, Park Si-dong floated the idea of purchasing US Treasuries as an alternative to troop deployment. The comment suggested that, given Korea's relatively low ratio of US Treasury holdings to GDP, expanding Treasury purchases could serve as a way to gain diplomatic leverage while also securing a stable return.