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TO RUEHC/SECSTATE WASHDC PRIORITY 2472
INFO RUEHSS/OECD POSTS COLLECTIVE PRIORITY
RUEHFL/AMCONSUL FLORENCE PRIORITY 3738
RUEHMIL/AMCONSUL MILAN PRIORITY 0170
RUEHNP/AMCONSUL NAPLES PRIORITY 3944
RUEANFA/NRC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY 4849

C O N F I D E N T I A L SECTION 01 OF 03 ROME 000878 
 
NOFORN 
SIPDIS 
 
DOE FOR INTERNATIONAL ENERGY COOPERATION DAS YOSHIDA 
DOE FOR OFFICE OF NUCLEAR ENERGY DAS MCGINNIS 
DOC FOR ENERGY AND ENVIRONMENTAL INDUSTRIES OFFICE SARAH 
LOPP 
USTR FOR A...

SUBJECT: ECONOMIC DEVELOPMENT MINISTER SCAJOLA'S U.S. VISIT 
TO STRESS NUCLEAR ENERGY AND OTHER COMMERCIAL COLLABORATION 
 
REF: A. ROME 815 
     ¶B. ROME 283 
     ¶C. ROME 207 
     ¶D. 08 ROME 1577 
     ¶E. 08 ROME 1191 
 
ROME 00000878  001.2 OF 003 
 
 
Classified By: CDA Elizabeth Dibble for reasons 1.4 b and d 
 


¶1. (C/NF) Summary: Economic Development Minister Claudio 
Scajola plans to visit the U.S. September 27 to October 3. 
He is keen to sign a nuclear energy agreement with DOE 
Secretary Chu focusing on both nuclear energy R&D, as well 
as nuclear industrial cooperation.  A nuclear energy 
cooperation agreement has been under discussion between DOE 
and the Ministry for some time.  The Italian desire to expand 
its reach, or to accompany an R&D agreement with a joint 
statement on industrial cooperation, marks a potentially 
important development in U.S.-Italian cooperation in the 
nuclear power sector.  U.S. nuclear suppliers are supportive 
of the approach in order to match recent Frano-Italian 
nuclear industrial cooperation agreements. (See para 9 for 
guidance request.) Scajola also intends to showcase Italian 
exports, visit the Finnmecanica helicopter production 
facility near Philadelphia and a Westinghouse nuclear plant 
in Western Pennsylvania.  In reaction to the Embassy's very 
active program on innovative entrepreneurship, Scajola will 
also visit Silicon Valley to investigate opportunities 
created by high-tech innovators and firms.  Post views the 
visit as a critical opportunity for the U.S. to counteract a 
decided Italian tilt toward French nuclear technology and to 
open the door to lucrative contracts for U.S. firms as 
Italy's nuclear restart gets underway.  End Summary. 
 



MINISTER SCAJOLA SEPTEMBER 27 TO OCTOBER 3 U.S. VISIT 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 


¶2. (C/NF) During a July 17 meeting with EcMin and FCS 
Counselor, the Ministry of Economic Development's Diplomatic 
Advisor Daniele Mancini confirmed Economic Development 
Minister Scajola's plans to visit the U.S. from September 27 
to October 3.  (See para 6 for a notional schedule already 
developed by the Italian Embassy in Washington.)  According 
to Mancini, Minister Scajola sees this as an important visit 
due to his desire to demonstrate that the Italian nuclear 
sector is open to U.S. companies, despite French domination 
of the nuclear power agenda in recent months.  Mancini added 
that other objectives of the visit will be to promote Italian 
products, stress the importance of innovation using U.S. 
centers of business excellence as examples, and encourage 
U.S. - Italian industrial/business cooperation. 
 


ITALY WANTS A MODIFIED NUCLEAR ENERGY AGREEMENT 
- - - - - - - - - - - - - - - - - - - - - - - - 
 

¶3. (C/NF) Mancini emphasized Minister Scajola's keen interest 
in following up on discussions he had with Energy Secretary 
Chu during the G8 Energy Ministerial in May in Rome.  Scajola 
wants to sign a nuclear energy cooperation agreement with DOE 
during a September 29 Washington call on Secretary Chu. 
However, Mancini stated that beyond a limited focus on 
scientific research cooperation (i.e. the exchange of staff 
and research information), Minister Scajola would like a 
somewhat broader agreement in order to facilitate U.S. - 
Italian industrial cooperation on nuclear energy sector 
development.  Mancini said that what Scajola has in mind is 
something similar to the nuclear energy cooperation agreement 
signed by Italy and France (ref B and separate cable to 
follow) last February. In addition, Mancini said that 
Minister Scajola is not interested in linking the proposed 
nuclear cooperation agreement to past agreements signed by 
previous governments. (Note: in an earlier meeting, Mancini 
told us that Minister Scajola wants to present this agreement 
to the GOI as a brand new agreement between the current 
Italian and U.S. governments. end note) 
 


¶4. (C/NF)  Scajola's Energy Security Director General 
 
ROME 00000878  002.2 OF 003 
 
 
subsequently told us that he would recommend to Scajola that 
he sign the current scientific R&D based nuclear energy 
cooperation agreement, as there may not be enough time to 
make the substantial changes that Scajola envisions before he 
visits Washington.  In order to meet Scajola's desire for a 
more expansive agreement, the DG favors a joint statement of 
intent, or a similar formula, that would serve as the basis 
for the conclusion of a more formal agreement in the future. 
Our sources rather confidently predict that Scajola will 
endorse this option.  Post will follow up to determine what 
option Scajola embraces. 
 


¶5. (C/NF) U.S.-based nuclear energy technology companies GE 
and Westinghouse have told us that a more specific 
nuclear energy industrial cooperation agreement (akin to what 
Scajola has in mind) might be crucial to opening the 
Italian nuclear energy market to U.S. companies.  GE and 
Westinghouse have expressed concerns that the current form 
of the nuclear energy cooperation agreement is limited to 
fostering USG - GOI scientific cooperation but does not 
provide for GOI commitments towards facilitating U.S. - 
Italian private sector cooperation.  These companies see 
such an accord as an important counterweight to the 
Italian-French nuclear energy cooperation agreement signed 
last February between PM Berlusconi and President Sarkozy. 
The Franco-Italian agreement provided the political base of 
support for the Italian and French parastatals ENEL and EdF's 
agreement to build four Areva nuclear plants in 
Italy.  According to GE and Westinghouse, the French 
government and companies have used these agreements as an 
effective platform with which to continue their aggressive 
lobbing of the GOI to keep competitors out of the Italian 
nuclear market.  Without a similar agreement from the U.S. 
side, both GE and Westinghouse fear that French nuclear 
technology and services will become the de-facto choice for 
Italy, locking U.S. companies out of a lucrative market 
potentially worth billions of dollars. Reliable Italian 
energy industry contacts who want Italy to have its options 
open to chose the best nuclear technology available have 
expressed the same concerns to Post.  They further tell us 
that a U.S.-Italy agreement whereby both countries agree to 
work towards facilitating private sector nuclear energy 
development cooperation will create crucial Italian political 
buy-in for U.S. nuclear technology. 
 


NOTIONAL SCHEDULE FOR SCAJOLA VISIT 
- - - - - - - - - - - - - - - - - - 
 

¶6. (SBU) Minister Scajola's full U.S. schedule accents some 
familiar themes, but the stress on nuclear energy, aerospace 
cooperation, and innovative entrepreneurship are highlights. 
 
September 27 - New York City arrival and participation at a 
National Italian American Foundation sponsored event; 
 
September 28 - a ""Made in Italy"" commercial promotion 
organized by the Italian Institute for Foreign Trade (ICE), 
followed by a meeting with Italian entrepreneurs; 
 
September 29 - separate meetings in Washington with 
Department of Energy (DOE) Secretary Chu, including the 
signing of the nuclear energy cooperation agreement, and with 
the U.S. Trade Representative Ron Kirk (Note: topics 
of discussion with Ambassador Kirk TBD, but IPR may be a 
topic); 
 
September 30/October 1 - visits to the 1) Augusta-Westland 
helicopter production plant near Philadelphia, 2) Beaver 
Valley nuclear power station in Pennsylvania (Note: Minister 
Scajola has accepted Westinghouse's invitation to 
tour this plant and Westinghouse is presumably working with 
the Italian Embassy in Washington on the arrangements, and 3) 
a Pittsburgh manufacturing plant owned by Italian company 
Ansaldo; 
 
October 2 and 3 - tour of Silicon Valley in the San Francisco 
 
ROME 00000878  003.2 OF 003 
 
 
Bay area, including meetings with high-tech 
entrepreneurs and institutions, to explore innovation 
opportunities of potential benefit to Italian companies. 
 



COMMENT 
- - - - 
 
¶7. (C/NF) Scajola's desire for a more specific U.S.-Italian 
nuclear energy cooperation agreement that can lay the 
groundwork for market access by U.S. companies is a welcome 
development.  We had previously voiced skepticism 
to the Italians about such an agreement, but the positive 
views offered by Westinghouse and GE have caused us to 
rethink this issue.  Given the in-roads made by French 
competitors, and with more than just a whiff of unsavory 
business practices in the air, Post has repeatedly engaged 
the GOI to urge a level-playing field for U.S. nuclear 
technology and services companies.  We are glad to see this 
as the first concrete sign that the Italians have come around 
to our view that instead of locking themselves into French 
technology, Italy would benefit from opening up its future 
nuclear sector to competition. As a result of our engagement, 
likely combined with a pragmatic realization of the 
technology advantages that U.S. nuclear technology companies 
offer, the GOI appears to want to keep its options open. 
During our July 17 meeting, for example, Mancini stressed 
that that the GOI has not locked Italy into French nuclear 
technology despite the (politically-arranged) ENEL-EdF deal. 
Quoting Scajola, Mancini told us that, ""We have not promised 
anything to anyone,"" and that ""Italy will have more than one 
nuclear technology.""  If the Italians want a more fine-tuned 
nuclear energy cooperation agreement for U.S. nuclear 
technology companies to provide them with other options, we 
should do what we can to provide them with one. U.S. nuclear 
energy technology companies could also not agree more. 
 


¶8. (C/NF) Based on this, we suggest that any U.S. - Italian 
nuclear energy cooperation statement or agreement that 
Washington considers include at least the following elements: 
A) a declaration of intent about the willingness of the U.S. 
and Italy to eliminate any obstacle toward bilateral 
industrial and commercial cooperation; B) cooperation in the 
field of nuclear safety, specifically in harmonization of 
regulations and standards which would be accepted in both 
countries; C) cooperation in safety-related research; D) 
support for the development of industrial partnerships 
concerning design and engineering, supply of components and 
systems, joint ventures in third countries, and cooperation 
in decommissioning of nuclear power plants. 
 


REQUEST FOR GUIDANCE 
- - - - - - - - - - - 
 

¶9. (C/NF) Post requests guidance to respond to questions by 
the Ministry of Economic Development inquiry on: 1) whether 
changes can be made to the current nuclear energy cooperation 
draft agreement to reflect Minister Scajola's preference for 
specific language on working to facilitate U.S.-Italian 
private sector cooperation in nuclear energy sector 
development; or 2) if Washington Agencies see time as too 
short before Minister Scajola's visit in late September, what 
alternate scenarios might be possible?  We would specifically 
be interested in knowing whether Secretary Chu and Minister 
Scajola might sign a joint declaration of intent to work 
together in the area of nuclear industrial policy. 
DIBBLE 
"