Balancing the National Interest U.S. National Security Export Controls and Global Economic Competition (1987) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-27
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and multilateral national security export controls and to seek strategies to regulate international technology transfer in such a manner as to achieve a desirable balance among the national objectives of military security, economic vitality, and scientific and technological advance. Three general principles underlie this analysisnamely, that it should be the policy of the United States (I J to promote the economic vitality of Free World countries, (2)
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control policies and procedures are in cianger now of overcorrecting in that they fad! to promote both military security and economic vitality, two objectives set forth in the statutes authorizing national security export controls.
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From these efforts has come a set of general principles and specific prescriptions for developing a more balanced and effective national * The panel was not charged to consider other applications of export controls including foreign policy and short supply constraints.
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The three general principles that underlie the panel's analysis propose that it should be the policy of the United States · to promote the economic vitality of Free World countries, · to maintain and invigorate the domestic technological base, and · to cooperate with its allies to impede the Soviet Union and other Warsaw Pact countries in their efforts to acquire Western technology that can be used directly or indirectly to enhance their military capability. As a general policy, the United States should strive to achieve clarity, simplicity, and consistency in its national security export control procedures, as well as in the multilateral CoCom*
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There is also growing concern in the Intelligence Community about the extent to which the Soviet Union and other Warsaw Pact countries have been or may be able to obtain controlled technology in Free World countries that do not cooperate in national security export controls. This concern applies both to the industrialized neutral countries of Europe and to some of the more advanced newly industrializing countries (such as India, Singapore, and Brazil)
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procurement process rather than a failure of export controls. Despite years of effort, then, the Soviets continue to lag the West technologically, and this gap may actually be widening due to Soviet dependence on generally outdated Western equipment and technology (particularly in the field of computer science)
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economy than do those that might reduce exports to the Eastern bloc. Although export controls are not a leading cause of the recent decline in U.S.
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In fact, the heart of the national security export control regime is a set of restrictions on exports to the Soviet bloc, which is maintained on a multilateral basis through the Coordinating Committee on Multilateral Export Controls (CoCom) , of which the United States is a founding member.
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In addition, technology controls also have created friction among the Western allies friction that may interfere with their successful collaboration on weapons development, production, and standardization, or on other matters bearing directly on East-West relations. In contrast to their benefits the costs of export controls are spread across an enormous volume of transactions representing a large share of
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The adverse competitive effects of export controls could be alleviated by the establishment of a community of common controls in dual use technology (i.e., a set of trade relationships unimpeded by national * The panel requested and was granted a "national interest exception" under Section 12(c)
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reflecting on their experience during the 12 months prior to May 1986, perceived the control system as frequently having significant adverse effects on their business: · 52 percent reported lost sales primarily as a consequence of export controls; · 26 percent had business deals turned down (in more than 212 separate instances) by Free World customers because of controls; · 38 percent had existing customers actually express a preference to shift to non-U.S.
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Moreover, in terms of the enforcement of reexport controls, the overwhelming majority of applications continue to come from U.S.-headquartered companies and their foreign affiliates, suggesting that compliance by foreign-owned firms is relatively poor. A possible explanation of this phenomenon may stem from foreign attitudes toward these controls as well as from the fact that such controls often duplicate those already imposed by the exporting country.
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and then to strive to gain CoCom-wide restrictions. One of the principal outcomes of the continuing interagency disagreement on export control policies and procedures has been the virtual breakdown of the technology decontrol process based on positive foreign availability findings, a process originally mandated by Congress in 1979.
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It will be critical in the future as a growing number of third countries become significant markets for CoCom-controlled goods and develop indigenous products that fall within CoCom control parameters. CoCom members have formally agreed as part of the so-called "third country initiative" to urge non-CoCom Free World nations to establish and strengthen their controls vis-a-vis proscribed nations.
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I THE PRACTICAL BASIS FOR NATIONAL SECURITY EXPORT CONTROLS The fundamental objective of the national security export control regime maintained by CoCom is to deny or at least to delay the Soviet Union and its Warsaw Pact allies access to state-of-the-art Western technology that would permit them to narrow the existing gap in military systems.
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SOVIET TECHNOLOGY ACQUISITION EFFORTS IN THE WEST 1. Available evidence on Soviet technology acquisition efforts reinforces the need for effective multilateral export controls.
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Because advanced technology has now diffused so widely, national security export controls cannot succeed without the following: (1) an effective CoCom process by which the other major CoCom countries accept responsibility for regulating exports and reexports from their territory of CoCom-controlled technology to non-CoCom Free World countries; and (2)
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reexport controls is not likely to become politically acceptable in most CoCom countries, some compromise solution must be reached.
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The imposition by the United States of unilateral national security export controls for dual use items can be justified only as a stopgap measure pending negotiations for the imposition of multilateral controls or in rare cases in which critical national security concerns
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Reorganization initiatives in a number of the principal line agencies tasked with managing export controls have resulted in a shift of responsibility away from organizations with expertise in technology development and international trade and toward those whose principal and often only concern is technology control. Although there have been positive ejects of this shift in responsibility, there has been a loss of sustained technical input into the policy process for national security export controls.
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export controls discourages compliance. The complexity of U.S.
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Despite some preliminary efforts to assess the competitive effects of national security export controls, a comprehensive empirical analysis of the costs and benefits is precluded by the lack of data, by the complexity of the system, and by a variety of qualitative judgments that must enter into any evaluation. There is little doubt that, without the heightened attention to these issues initiated in the early years of the current administration by DoD, the problem of Western technology diversion to the Soviet Union would by now be considerably worse.
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to obtain agreement on a common approach to reexports of CoCom-origin items. The United States should strive to create a community of common controls in dual use technology that is, a set of trade relationships unimpeded by national security restrictions among those Free World nations that share an expressed willingness to adhere to common or equivalent export control restraints on the transfer of strategic and controllable goods and technologies to the Soviet Union and its Warsaw Pact allies.
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5. Maintain Unilateral Controls Only on a Temporary Basis or for Limited, Unique National Security Circumstances Regardless of the rate of progress on CoCom and third country negotiations, the United States should eliminate the use of unilateral national security export controls except in those circumstances in which active efforts are under way to negotiate multilateral controls within and outside of CoCom in which case unilateral controls could be maintained on a temporary basis or in those situations in which unique national security circumstances warrant the imposition of such controls for limited periods of time.
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6. Eliminate Reexport Authorization Requirements in Countries Participating in a Community of Common Export Controls on Dual Use Technology To further the objective of developing a community of common controls on dual use technology among cooperating countries of the Free World and to encourage international cooperation and trust, the United States should eliminate any requirement that a buyer must seek authorization for a reexport that is subject to CoCom or "CoCom-like" controls by the country initially exporting the product or technology..For effective enforcement, reliance should be placed instead on the cooperating governments.
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NATIONAL SE CURITY EXPORT CONTROL DECISIONS TO MAINTAINING U.S. TECHNOLOGICAL STRENGTH, ECONOMIC VITALITY, AND ALLIED UNITY The panel recommends that executive branch decisions concerning national security export controls accord greater importance than they currently do to maintaining U.S.
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to provide effective, two-way communication between the highest levels of government and of the private sector on the formulation and implementation of coordinated national policies that balance military security and economic vitality. To this end the panel recommends that senior policy staff of the Executive Office of the President meet periodically with the President's Export Council and/or other respected representatives of the private sector and inform the President of the concerns of this sector regarding the domestic and international commercial impacts of national security export controls.
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