US-China Nuclear Trade Vital to American Interests

Jul 17 - Global Data Point

Congress is reviewing a renewed bilateral trade agreement, named after Section 123 in the Atomic Energy Act of 1954, to replace the one that expires in December.

"During the past decade, U.S. civilian nuclear energy cooperation with China under the current Section 123 agreement has brought significant economic benefits to American workers [and] the U.S. economy and has advanced important national interests, including nuclear safety and nonproliferation," NEI Vice President for Suppliers and International Programs Daniel Lipman stated in written testimony provided to the panel.

"The industry expects that the new U.S.- China agreement under review by Congress will bring even greater benefits and therefore supports its entry into force without delay or undue encumbrance on commercial cooperation or export licensing."

President Obama submitted the new 30-year Section 123 agreement for congressional review on April 21 . Such agreements are subject to a review period of 90 days of continuous congressional session. If no resolution of disapproval is passed into law during that time, the agreement enters into force.

Lipman noted that China is the "world's largest market for nuclear plant construction," with 24 reactors under construction and plans to begin building 14 more by 2017. Servicing and supporting this massive buildout of infrastructure represents a huge opportunity for American firms.

"Each [Chinese] nuclear plant that is brought into operation will provide the U.S. industry with a 40- to 60-year opportunity to provide ongoing support services and products," Lipman said.

"Through 2040, the direct economic benefit to the U.S. of the renewed nuclear cooperation agreement with China is expected to be between $70 billion and $204 billion , with between 20,000 and 45,000 direct American jobs supported annually."

Lipman added that trade cooperation with China also promotes critical U.S. policy objectives in the areas of nuclear safety and nonproliferation.

"U.S. commercial involvement ensures the highest possible levels of nuclear power plant safety and reliability, maintains U.S. leadership in nuclear energy technology and strengthens U.S. influence over global nuclear nonproliferation policy and practices," Lipman said.

He warned that a failure to renew the agreement would hurt U.S. interests in all of those areas.

"It would ... be naïve to believe that the Chinese cannot realize their nuclear energy development goals without the United States . The Chinese have other options. If Congress chooses to prevent U.S. industry from participating in the Chinese market and accruing the benefits outlined above, other vendor nations like Russia and France will benefit."

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