	Background

Under Section 123 of the U.S. Atomic Energy Act of 1954, as amended,  nuclear cooperation agreements are a prerequisite to certain aspects of  civilian U.S. nuclear cooperation with countries and other cooperating  partners. Agencies Do Not Systematically Track and Report Data Needed to Assess Export Benefits Facilitated by Nuclear Cooperation Agreements

No single federal agency systematically tracks and reports the data  necessary to determine the amount and value of U.S. nuclear exports  facilitated by U.S. nuclear cooperation agreements. Existing data from  Commerce, DOE, and NRC contain gaps and in some cases were not  sufficiently detailed for our reporting purposes. The U.S. Share of Global Exports of Sensitive Nuclear Material and Reactors, Major Components, and Minor Parts Has Declined in the Last 15 Years

Based on available data, while the value of U.S. exports of sensitive  nuclear material has remained stable from 1994 through 2008, the U.S.  share of global exports of sensitive nuclear material declined significantly  over the same period. Finally, the United States imports sensitive nuclear material, nuclear  reactors, major components and equipment, and minor reactor parts from  other countries. In sum, the United States was a net importer of nuclear  components and materials, which may indicate a lack of comparative  advantage in this industry. Commerce Has an Initiative to Coordinate Interagency Efforts, but Has Made Limited Progress and Does Not Have a Well- Defined Strategy to Promote the U.S. Nuclear Industry Globally

DOE, NRC, and State officials told us they rely on Commerce to develop  and lead U.S. nuclear industry export promotion activities because  Commerce’s mission includes providing trade support to U.S. businesses  and trade promotion. Commerce launched the Civil Nuclear Trade  Initiative in 2008 to help promote the competitiveness of the U.S. nuclear  industry; however, this initiative has made limited progress. In  addition, U.S. agency and industry representatives and foreign government  officials we interviewed identified challenges that U.S. companies face  that, in their view, impede the U.S. nuclear industry’s ability to compete  globally. U.S. Nuclear Industry May Not Be Well-Positioned to Secure Trade Benefits and U.S. Companies Face Competition from State- Owned Nuclear Firms

Officials from Commerce, State, and DOE, as well as U.S. industry told us  they are concerned that the U.S. nuclear industry may not be well- positioned to secure the trade benefits facilitated by nuclear cooperation  agreements due to a decline in domestic manufacturing capabilities,  increased international competition, and U.S. industry’s liability concerns. The United States has ratified this convention, but it has  not yet come into force. Some U.S. Policies and Practices Are Viewed by Industry Officials and Foreign Governments as Impediments to U.S. Nuclear Exports

U.S. industry representatives and foreign government officials we  interviewed identified certain U.S. government policies and practices that,  in their view, impede the U.S. nuclear industry’s ability to compete  globally for nuclear trade. In particular, industry representatives told us  that DOE’s regulations governing the Part 810 authorization process place  U.S. companies at a competitive disadvantage. Recommendations for Executive Action

To help federal agencies gain a better understanding of how—and the  extent to which—nuclear cooperation agreements impact exports to other  countries, we recommend that the Secretary of Commerce, working with  the Secretaries of Energy and State and the Chairman of the Nuclear  Regulatory Commission, take the following three actions:  identify what additional nuclear export data and information may be  necessary to better quantify the export benefits associated with these  agreements; review, with an eye toward strengthening, Commerce’s existing nuclear  export promotion strategy document to, among other things, identify key  market opportunities for U.S. nuclear industry, and develop key goals and  an implementation plan for achieving these goals; and    consider ways for the TPCC Civil Nuclear Trade Working Group to obtain  a more comprehensive range of U.S. industry views. Commerce agreed with two of our three recommendations. In addition, we found that Commerce’s strategy  document for the initiative has some limitations, including that it does not  identify key market opportunities and goals; have an implementation plan;  nor includes metrics, benchmarks, or timelines to measure progress in  meeting specific goals. GAO staff who made key contributions to this  report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

We addressed the following questions during our review: (1) quantify the  amount and value of U.S. nuclear exports facilitated by these agreements;  (2) assess U.S. government efforts to support the U.S. nuclear industry’s  ability to compete for sales made possible by nuclear cooperation  agreements between the United States and other countries; and (3)  examine U.S. nuclear industry challenges to exporting as identified by  industry representatives and U.S. and foreign government officials. We  are making this recommendation because Commerce needs to  strengthen interagency coordination efforts to promote nuclear trade. 10. 2. 3.
Why GAO Did This Study

The United States has 26 agreements in force for peaceful nuclear cooperation. Under the U.S. Atomic Energy Act of 1954, as amended, these agreements are a prerequisite to certain aspects of U.S. nuclear cooperation with other cooperating partners. GAO was asked to (1) quantify the amount and value of U.S. nuclear exports facilitated by these agreements, (2) assess U.S. efforts to support the U.S. nuclear industry's ability to compete for sales, and (3) examine U.S. nuclear industry challenges to exporting. To conduct this work, GAO reviewed and assessed data collection efforts by U.S. agencies from 1994 through 2008, analyzed available data, and interviewed U.S. industry representatives and U.S. and foreign government officials.

What GAO Found

No single federal agency systematically tracks and reports the data necessary to determine the amount and value of U.S. nuclear exports facilitated by U.S. nuclear cooperation agreements. Data from the departments of Commerce, Energy (DOE), State, and the Nuclear Regulatory Commission (NRC) contain gaps and in some cases were not sufficiently detailed for GAO's reporting purposes. Using data from the United Nations Commodity Trade Statistics database, GAO found that the United States' share of global exports of nuclear material, reactors, and components has declined in the last 15 years. For example, the amount of U.S. exports of sensitive nuclear material such as natural and enriched uranium remained stable, while the U.S. share of global exports for these materials decreased significantly, from 29 percent to 10 percent, from 1994 through 2008. The United States also imports sensitive nuclear material, nuclear reactors, major components and equipment, and minor reactor parts from other countries. GAO found that in sum, the United States was a net importer of nuclear components and materials, which may indicate a lack of comparative advantage in this industry. Commerce has an initiative to coordinate interagency efforts and identify and respond to the U.S. nuclear industry's trade policy challenges, but the initiative has made limited progress and does not include a well-defined strategy to support and promote U.S. nuclear industry efforts to compete globally. DOE, NRC, and State officials told us they rely on Commerce to develop and lead U.S. nuclear industry export promotion activities. In October 2008, Commerce established the Civil Nuclear Trade Initiative to help promote the competitiveness of the U.S. nuclear industry. The initiative aims to, among other things, coordinate interagency efforts and identify and respond to trade policy challenges faced by the U.S. nuclear industry. However, the initiative has made limited progress. For example, the initiative's interagency trade promotion committee to coordinate interagency efforts on behalf of U.S. industry has received briefings from only three U.S. nuclear companies; though Commerce officials report many more companies would like to participate. In addition, the initiative's strategy document has some limitations, in that it does not establish goals, does not have an implementation plan, and does not contain metrics for measuring its progress, which are critical for agencies to achieve intended goals. Commerce, State, and DOE officials as well as U.S. industry representatives identified challenges facing the U.S. nuclear industry, including a decline in domestic manufacturing capabilities, increased international competition, and U.S. industry's liability concerns. In addition, U.S. industry representatives and U.S. foreign government officials GAO interviewed also identified challenges that, in their view, impede the U.S. nuclear industry's ability to compete globally for nuclear trade, including a DOE process for authorizing the transfer of U.S. nuclear technology and technical information overseas. In particular, industry representatives told us they believe that DOE's regulations are outdated and place U.S. companies at a competitive disadvantage.

What GAO Recommends

GAO recommends that Commerce (1) identify additional nuclear data that may better quantify the export benefits of nuclear cooperation agreements, (2) review its strategy document to identify markets and include benchmarks for evaluating progress, and (3) consider ways the interagency trade promotion committee may obtain a comprehensive range of U.S. industry views. Commerce agreed with our first two recommendations but disagreed with the third, stating that it already has mechanisms in place to obtain industry views. GAO is making this recommendation because Commerce needs to strengthen interagency coordination efforts to promote nuclear trade.