22 February 1997
Source: http://www.usis-israel.org.il/publish/econews/1997/january/eco0122c.htm

Washington -- William Daley, President Clinton's nominee for secretary of commerce, says he supports imposing sanctions on China if that country engages in weapons proliferation.

His statement, released January 22, came in his written answers to written questions submitted by Senator Kay Bailey Hutchison, a Texas Republican who sits on the Senate Commerce Committee, which is considering Daley's nomination.

Daley says the best way to keep sensitive technology from rogue nations is through multilateral export-control regimes like the new Wassenaar Arrangement.

Hutchison asserts that no present export-control regime works as well as the Cold War-era Coordinating Committee for Multilateral Export Controls (COCOM), which dissolved in 1994.

In reply, Daley argues that the Wassenaar Arrangement should prove effective in preventing "destabilizing accumulation of arms."

He also defends the Clinton administration decision in 1996 transferring responsibility for export controls on "hot-section technology" from the State Department to the Commerce Department.

Following is an excerpt from Hutchison's questions and Daley's answers:

(Begin excerpt)

Question 6: The Department of Commerce has an extensive role in export controls. I am concerned about the Clinton administration's decision in Executive Order No. 12981, issued last March, to change the export licensing jurisdiction for hot-section technology, transferring responsibility for export controls from the tougher restrictions of the State Department's Munitions List to the Department of Commerce. (Hot-section technology increases the strength of metals so they can withstand high heat.) I believe the Administration's Executive Order could open the way for permitting nations who are not our allies to get access to our highly sensitive technology. What is your view of how Executive Order No. 12981 should be implemented or changed and whether any export controls will be lifted for hot section technology?

Answer 6: I understand that Executive Order 12981, which was issued December 5, 1995, only addresses procedures for processing dual-use export license applications. Under this Executive Order, all relevant agencies are represented in the inter-agency process that makes decisions about dual-use export license applications. The Executive Order guarantees that the State Department, the Defense Department, the Energy Department, and the Arms Control and Disarmament Agency can review and make recommendations on any dual-use export license applications they wish to see and have the fight to escalate the decision on those applications all the way to the President if they choose. In return, those agencies have accepted certain disciplines on the process, notably a limited time to make a decision, a requirement that they detail the reasons for their objections, if any, and a commitment that an action to escalate a decision to higher levels be made by senior officials rather than a career civil servant. This Executive Order did not change the jurisdiction over the export of hot section technology or in any other way address the issue of hot section technology.

The President did decide, in March 1996, to transfer jurisdiction over the export of hot section technology from State to Commerce. I understand that this decision constituted a change of process and not policy. These items remain subject to world-wide export controls, and all licenses will be reviewed by both the State and Defense Departments. The President believes, as do I, that this is a dual-use technology, not a munition; that is, it has both civilian and military applications, and therefore should be controlled by the Department of Commerce pursuant to the Export Administration Act and Regulations. The result of the President's action will be more timely decisions made through a more transparent process.

Question 7: While most experts agree that the proliferation of weapons of mass destruction is among our greatest national security concerns, we don't have a satisfactory successor to COCOM, the coordinating committee on multilateral export controls. What is being done to put into place effective and strong multilateral export controls?

Answer 7: I understand that the United States has played the leading role in establishing and strengthening the three multilateral regimes which focus on preventing the proliferation of weapons of mass destruction. These are the Nuclear Suppliers Group for nuclear weapons, the Australia Group for chemical and biological weapons, and the Missile Technology Control Regime for missiles. Multilateral efforts to stem the proliferation of weapons of mass destruction has been one of the highest foreign policy objectives of this administration, and this will continue to be the case at Commerce if I am confirmed.

There is also a new multilateral regime, the Wassenaar Arrangement, which has just begun its work. Wassenaar seeks to promote greater transparency and responsibility in dual-use exports not covered by the other regimes and arms exports, so as to build regional and international stability.

We will continue to make the greatest possible effort to strengthen multilateral non-proliferation efforts. Perhaps the most valuable action we could take in the next few weeks would be the ratification by the Senate of the Chemical Weapons Convention. The United States will be one of the last nations to ratify this treaty; ratification will be important for strengthening multilateral non-proliferation efforts and for strengthening the leadership role of the United States. As the President has made clear, the administration will press for early ratification.

Question 8: Do you agree with the assessment that there has not been a successful export control regime developed that is as successful as the earlier COCOM mechanisms? If you agree, to what would you attribute the failure to establish such a mechanism? How would you work to develop effective export control mechanisms?

Answer 8: COCOM was a valuable multilateral instrument forged for the Cold War. It worked well, but the Cold War is now over, and the international security environment presents different challenges which require a different response. As I understand it, one of the major diplomatic efforts undertaken in the first Clinton administration was to establish a new multilateral regime to ensure that arms transfers and exports of sensitive industrial equipment would contribute to regional and international security and stability.

This regime, the Wassenaar Arrangement, promotes greater transparency and responsibility in order to build regional stability and international security. Its members have agreed to prevent destabilizing accumulations of arms. Wassenaar provides an effective platform for building multilateral export controls. Its membership goes well beyond that of COCOM, with 33 members, including Russia and the Ukraine and new industrial powers like South Korea and Argentina.

If I am confirmed, continued development of the Wassenaar Arrangement to meet new international challenges will be one of the items on Commerce's agenda for the next four years. We will push for greater transparency in arms transfers and industrial exports and greater harmonization of export policies among member states.

Question 9: Do you believe in the fundamental premise that this country's national security concerns must take priority over commercial relations and U.S. exports overseas?

Answer 9: I believe your concerns can best be addressed on two different levels -- first, reflecting the critically important changes that are taking place worldwide that affect our competitiveness; and, second, the specific role of Commerce in many important "dual-use technologies."

First, it is important to understand the far reaching changes in the world economy. We are in the midst of the most fluid economic change since Americans left their farms for factories. The last 25 years have unleased unprecedented and unparalleled domestic and global competition. Because of these changes, America's economic success and its strategic and political concerns at home and abroad are much more closely intertwined. Our jobs, our standard of living and the future of our children and grandchildren depend on our having a growing and successful domestic economy, and American companies competing and winning in the international marketplace. Thus, there is increasing overlap between national security and economic security issues. I am aware and sensitive to this development.

Second, as to Commerce's specific role, the Commerce Department controls dual-use goods and technologies -- those that have both civilian and military applications. The law requires that these items be controlled for national security and foreign policy purposes, but the law also requires that in making those judgments we take into account economic issues like the availability of similar items from foreign sources and the economic costs and benefits of the unilateral controls we impose. The Clinton administration has worked hard to ensure that these various factors are fully vetted and balanced in an interagency process. That is why both economic agencies like Commerce and national security agencies like Defense are at the table. I support that balanced approach because I believe it fully protects our national security and foreign policy interests without unnecessarily sacrificing our commercial objectives.

Question 10: Are you prepared to strengthen U.S. and multilateral export controls toward China in the event that Beijing engages in proliferation activities?

Answer 10: Our laws contain requirements for sanctions, including stricter export controls, if the People's Republic of China engages in proliferation activities. I support implementing those laws and imposing sanctions if the facts of Chinese behavior meet the tests in the laws. The Clinton administration has, in fact, already sanctioned China for missile proliferation activities in 1993, as did the Bush administration prior to that.

Question 11: What is your position as compared to your predecessors regarding what this nation should do in the face of mounting evidence that our allies sell sensitive technologies to nations to which we would not sell such goods?

Answer 11: The best way to keep sensitive technologies out of the hands of our adversaries is through multilateral export control regimes that constrain the activities of all of their members. The United States has been instrumental over the years in creating and strengthening these regimes -- COCOM, the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Australia Group (AG) for chemical and biological weapons, and, most recently, the Wassenaar Arrangement for conventional weapons and sensitive dual-use technologies. Each of these regimes has been growing in membership, and the administration has been encouraging all of them to strengthen their procedures and improve the flow of information between members so we can do a better job of deterring exports that would help rogue nations develop conventional military capabilities or weapons of mass destruction. Both my predecessors in the Clinton administration supported these regimes, and I remain committed to further strengthening them and to maintaining U.S. export control policy consistent with them. The administration has, on a number of other occasions, imposed unilateral controls for specific purposes (terrorism, for example) or imposed unilateral sanctions, as in the case of Iran, to further our foreign policy and national security interests. Like my predecessors, I support the actions the President has taken, and if confirmed I will work closely with my colleagues in the Cabinet to deal decisively with future cases, should they arise.

(End excerpts)

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See related notice on export of dual-use items.