Administration Officials Tout Progress in Streamlining Control Policies for High-Tech Exports

February 4, 2014 - via Seapower Magazine

WASHINGTON – After decades of complaints from the aerospace and defense industries that restrictive export control policies were hurting America’s ability to sell high-tech goods overseas, but strong resistance from congressional conservatives to any loosening of controls, officials with the administration of President Barack Obama reported Feb. 4 they have made substantial progress toward a streamlined control policy that will tightly control only the most important materials. “The reform helps focus efforts on the threats that matter most,” said Caroline Atkinson, the White House deputy national security adviser for international economics, said at a Center for Strategic and International Studies forum. “Not all items and not all end users present the same threat,” Atkinson said.

The goal is to develop a process that protects America’s technological edge, that helps improve interoperability and defense capabilities of U.S. allies and sustain the defense industry and jobs, said Atkinson and a panel of officials from the White House and departments of State, Commerce and Homeland Security.

Since the beginning of the Cold War, exports of U.S. products have been controlled by two processes.
A long list of items considered to have military value and so-called “dual-use materials” used in commercial products but with potential military application have been placed on the “munitions list” and their export has been tightly controlled by the State Department, with advice from the Defense Department.

Export of other products considered solely commercial has been controlled through a much easier process managed by the Commerce Department.

The original purpose of the restrictive munitions list process was to keep U.S. military technology out of the hands of the Soviet Union and China. But over the years, particularly since the collapse of the Soviet Union and the end of the Cold War, U.S. manufacturers increasingly have complained that the munitions list restrictions were trapping items widely available in the commercial markets and with little or no important military effect.

Particularly frustrating were thousands of standard items, such as valves, pumps and electronic cables that, because they were used in military aircraft or other weapons systems, were controlled by State if they were included in a commercial aircraft or vehicle.

As a result, many U.S. leading-edge producers had trouble selling overseas because potential customers did not want to go through the lengthy and uncertain process for an export license. Under growing pressure from aerospace and high-tech producers, former President George W. Bush made an attempt to reform the export control process, but was stymied by strong opposition from arms control advocates and members of Congress who feared U.S technology would aid potential enemies.

A new effort was urged by then-Defense Secretary Robert Gates, and embraced by President Obama, who was eager to boost the U.S. economy out of the deep recession. Atkinson and the other officials said a tightly integrated interagency process has made substantial progress toward the ultimate goal of dramatically reducing the number of items on the munitions list and creating a single licensing process, run by Commerce.

As of last year, they had cleared 80 percent of the items, with potential export value of $80 billion, Atkinson said. They expect to clear a final category, which includes commercial satellites and advanced electronics, this year, she said. At that point, the administration would ask Congress for legislation to approve the revised munitions list and create the single licensing system, which would provide a quicker, simpler and more predictable process for exporters.

Kevin Wolf, the assistant secretary of Commerce for Export Administration, said they have worked closely with industry on every proposed change and “they appreciate the progress.”

Tom Kelly, acting assistant secretary of State, similarly said they have briefed Congress consistently throughout the review. “I think we have very broad support on the Hill,” he said.

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Author:Otto Kreisher

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