23 September 1999
Source:
http://www.usia.gov/cgi-bin/washfile/display.pl?p=/products/washfile/latest/&f=99092302.clt&t=/products/washfile/newsitem.shtml
USIS Washington
File
_________________________________
23 September 1999
(Compromise of military, business interests attempted) (870) By Bruce Odessey USIA Staff Writer Washington -- The Senate Banking Committee has approved compromise legislation rewriting the basic U.S. law for controlling exports of advanced technology. By 19-0 committee members voted for the bill, called the Export Administration Act (EAA) of 1999, September 23 even though most of them had reservations about specific provisions. The bill would decontrol most of the items now controlled for national security and foreign policy reasons. Senator Phil Gramm, the Republican committee chairman, predicted it would reduce the number of Commerce Department export licenses from 10,000 to 1,000 a year. Under Secretary of Commerce William Reinsch told reporters that, although the administration was unhappy with some provisions, "we can live with it." Gramm said he expected to meet with Clinton administration and industry officials in a few days to try to resolve remaining issues. He said he intended to bring the bill for a vote in the full Senate during October and to fend off amendments. The bill would replace the EAA of 1979, which expired in August 1994. Since then President Clinton has kept the export-control system in force under the International Emergency Economic Powers Act (IEEPA) even though such use of that law has been viewed as controversial and open to challenge in court. Many attempts over a decade to rewrite the Cold War-era 1979 EAA have foundered in Congress, which like the administration has been split by military and business interests. Even now Reinsch hesitates to predict final passage by Congress of EAA reauthorization. The U.S. House of Representatives has taken no action since a subcommittee held a hearing in March. Another Commerce Department official expected House leaders would not act until the Senate votes. One part of the bill concerns national security controls that aim to halt shipments of advanced technology to adversary countries and prevent proliferation of nuclear, biological and chemical weapons. New and important to the bill is a provision prohibiting controls on technology that has achieved mass-market status. "Once an item is mass-marketed ... then it's too late" for controls, Gramm said. The bill would also clarify procedures for decontrolling an item that is found to be widely available outside the United States. One objective of the bill is to encourage effective multilateral controls. A committee staff analysis specifically criticizes the Wassenaar Arrangement export-control regime for arms and technology as weak because it leaves enforcement to the discretion of the 33 member national governments. "Eliminating national discretion may only be possible by reducing the list of controlled items," the paper said. "Also, since some of the member countries include countries of concern (Russia) and the list of target countries does not include China, it may be necessary to consider a new control regime." The bill would leave intact Congress' 1998 legislation removing jurisdiction for satellite exports from the Commerce Department to the State Department, which has tighter controls. It would modify 1997 legislation that tightened controls on exports of high-performance computers. It would reduce the delay from six to two months for effecting any policy change raising the threshold on computer exports to a group of about 50 countries including China, Russia, India, Pakistan and Israel. President Clinton announced such an increase July 1. To ease the burden on the Commerce Department, the bill would repeal the 1997 provision requiring Commerce post-shipment verifications on all licensed computer exports to China and other countries in that group. It would give the department flexibility to set priorities for conducting such inspections aimed at discovering illegal diversions. Under the bill, if China or another country denied a post-shipment inspection request, Commerce could deny future exports of such computers to that country. The bill would generally prohibit controls on U.S. exports of goods containing less than 25 percent controlled items by value. Another section of the bill concerns export controls imposed for foreign policy objectives such as promoting human rights and deterring terrorism. For the first time it would set cost-benefit disciplines for imposing such controls. Another section would exempt agricultural commodities and medical supplies from foreign policy export controls except for countries like Cuba that are subject to a comprehensive embargo under the Trading With the Enemy Act. Senator Christopher Dodd, a Connecticut Democrat on the committee, is expected during full Senate consideration to offer an amendment extending the exemption to Cuba. Such a controversial amendment could lead opponents to try to delay final passage of the bill by filibuster. The bill would also sharply increase fines for EAA violations, up to $1 million for individuals and $10 million for corporations. Paul Freedenberg, former under secretary of commerce and now government affairs director for the Association for Manufacturing Technology, predicted that Senate conservatives will try generally to strengthen the national security and foreign policy provisions and specifically to tighten controls on computer exports to China. Still, during a telephone interview he expressed some optimism about the bill's chances to become law. "This is the first bill that has a very good chance of passage to reauthorize the act in more than a decade," Freedenberg said.