Post-Pandemic Strategic Planning -- the Nuclear Sector as a Best Practice?

In a previous blog, I mused about the importance of assessing the foreign and domestic policy implications of energy technology from a strategic perspective. Let’s now focus on Canada’s nuclear technology – and see how it fits with the post-pandemic world.

Kevin Lynch and Paul Deegan identified five lasting implications of COVID-19 that they said should be part of our post-pandemic strategic planning: mountains of debt; global de-coupling in trade and investment; capacity of the national health-care system; disruption of the nature of work and the workplace; and geopolitics (rise in nationalism/decline in multilateralism). (Globe & Mail, 2 April)

What are the implications of global de-coupling and geopolitics with respect to nuclear energy and technology? How should we conduct our post-pandemic strategic planning vis-à-vis this sector? 

David Frum made an interesting point. Consider globalization as not one thing but as many things – some valuable, some less so. Each of those things comes attended by costs; each, therefore, needs a strategy to manage and contain its costs.

The strategy should not be retreat from the benefits of international trade and investment. Autarky and withdrawal into economic nationalism are not the answer. Instead, the strategy has to be “smarter”. It should seek mutually beneficial sectoral arrangements where the flows of goods and services are protected by a strong governance regime.

Is there such a sector that illustrates this “smarter strategy”, where interactions between countries are subject to strong governance? 

I would say yes – namely, Canada’s international relationships governing cooperation in the civil nuclear technology sector and the export of such technology, products and services.   

All countries with which Canada cooperates, trades, supplies, performs research across the nuclear sector must have a bilateral Nuclear Cooperation Agreement (NCA). Here is a sampling of the conditions imposed by a typical NCA. They include:

• Assurances that Canadian nuclear exports will be used only for peaceful, non-explosive end-uses
• Canadian control over any Canadian items subject to the NCA that are re-transferred to a third party
• Application of full-scope safeguards administered by the International Atomic Energy Agency on all current and future nuclear activities
• Assurances that Canadian nuclear items will be subject to adequate physical protection measures to ensure that they are not stolen or otherwise misused.

Currently we have 30 NCAs in place with 48 countries (the NCA with Euratom covers several European Union countries). You can find more about NCAs on the Global Affairs Canada website, including the Canada Treaty Information database.

NCA agreements must be in place for the export of Canadian CANDU technology and products to continue; for Canadian uranium to be exported; or for Canadian medical isotopes and Cobalt-60 to go abroad.

Cooperation and trade in Canada’s nuclear export sector is thus well-governed. It should stand the test of potential fragmentation of markets in a “de-globalizing” world and keep appropriate standards intact.

Looking to the future, in order to export Small Modular Reactors (SMRs) that are successfully developed and licensed in Canada to countries needing clean energy, those receiving countries will need an NCA with Canada before an export licence can be granted.

Today there is growing awareness of the economic vulnerabilities that globalization creates for some countries. This leads strategic planners to consider the implications, positive and negative, of de-coupling and economic nationalism. 

However, it’s not an either/or question of pursuing freer trade or retreating behind tariff walls. We don’t have to put everything into a completely unfettered arena or back away entirely. Instead, we can seek bilateral or multilateral trade and cooperation arrangements based on strong rules governing the activities therein – including effective compliance.

The nuclear industry in Canada offers an example. The movement of goods, services and technology abroad – whether between commercial companies or between research labs and universities – is strictly managed.

I would argue that having such governance will be the key to new markets for Canadian nuclear technology – in SMRs and advanced CANDU reactors, in cancer-treating and food safety nuclear isotopes, in the export of Canadian uranium, the source of clean energy.

If you’re a post-pandemic strategic planner, you might give this some thought.