22 April 1999 Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html ----------------------------------------------------------------------- [Congressional Record: April 20, 1999 (House)] [Page H2142] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr20ap99-70] AMERICA'S EXPORT CONTROL POLICY The SPEAKER pro tempore. Under the Speaker's announced policy of January 19, 1999, the gentleman from Washington (Mr. Smith) is recognized during morning hour debates for 5 minutes. Mr. SMITH of Washington. Mr. Speaker, I rise today to discuss our Nation's export control policy. Obviously, economic growth is a key to a prosperous future in this country, but that fact points out how important exports are. When we look at the world right now, we have a unique situation where, though the United States represents only 4 percent of the world's population, we currently consume 20 percent of the world's goods, services, and products. In other words, if we are going to have economic growth in the country, we are going to have to open up foreign markets. We are going to have to export, and take advantage of that 96 percent of the world's population that does not reside in the United States. When we look at it once again, the recent trade deficit figures just released today show another record trade deficit. There are a lot of issues that contribute to that. Today I would like to talk about just a couple that have to do with our export control policy, the policy of the United States in limiting the number of goods and products that can be exported from this country. These are limited in a couple of ways. One of them is through what are called unilateral economic sanctions. That is basically where we as a country decide we disapprove of some action of another country, and then decide that we are not going to allow U.S. businesses to export to them. I completely agree that we as a country need to stand up for things like democratic freedoms, religious freedoms, economic freedoms in the rest of the world, and do everything we can to encourage and promote those, but policies of unilateral economic sanctions do not get us there. Basically, all they do is force those countries to buy their goods from some other place. The reason for this is the changing economy. As we have all heard, it has become a cliche now, we live in a global economy. What that means is if we attempt to impose our will on another country through unilateral economic sanctions, we will fail. It will not work, because that country can simply go to any one of the other members of this global economy and purchase what they want. All we accomplish in that situation is restricting our own companies' abilities to export. Multilateral economic sanctions make a certain amount of sense. If we can get enough of our global partners together, as was in the case in South Africa, as is the case in Iraq, to institute export control policies so that it is not just us alone, the United States, then the policies can work and can exercise some influence to make some changes, as they did in South Africa. What I am opposed to is the proliferation of unilateral economic sanctions that do not succeed in their stated goal and harm our economy. There are several bills in Congress right now that will attempt to change that policy. I am proud to be a cosponsor of the House bill, and I think we need to move in that direction. I have brought a chart with me to illustrate the point. This chart shows the number of countries in the world that currently have some export controls on them; in other words, the number of countries which U.S. businesses are somehow limited in their ability to export to. We can see that it is a large number of countries, as they are represented in red. They cover a substantial portion of the globe and a substantial number of people; in other words, possible markets that we are losing out on as a country. If we could change that policy and open up those markets, it could be a boon to U.S. industry, and I must once again point out these policies have not had much effect on changing the policies of the other countries that we want to see changed. So unilateral economic sanctions have reached the point where they do not work. All they are is bad for U.S. companies. If we want to expand and grow, we are going to need access to these markets. We need to make those changes to get there. There are a couple of other aspects of our export controls policy right now that are particularly troubling because they focus on technology. In other words, they focus on the highest-growing segment of our economy, and indeed of the world's economy. They are controls on encryption software and on computers. Basically, the U.S. has a policy right now that basically looks at technology and says, we need to develop the best technology here in this country, and then for national security reasons, we are going to put our arms around it and prevent the rest of the world from getting it, it will be protecting our national security. There are a number of flaws with this theory, but the biggest one I want to point out is, once again, the global economy. There is access to this technology from other countries other than the U.S. We cannot stop that. By implementing these policies, all we are doing is restricting U.S. companies' ability to participate. The biggest point I want to make on restrictions of technology, this is not, and I repeat, not a choice between business and national security. If that was the case, absolutely, we would choose national security, end of story. The point is it does not help because these countries access the information elsewhere. Take encryption as just one example, a simple software designed to protect programs. We restrict the exportation of top-of-the-line encryption technology, but top-of-the-line encryption technology is available from a number of other countries, and in fact we can download it off the Internet. Our restrictions do not prevent these other countries from getting it, they only prevent our countries from being the ones that are able to sell it. In the long run this even harms national security by restricting our ability to develop the next best technology. We need to reexamine our policy of export controls for all of these reasons. ____________________ ------------------------------------------------------------------------ [Congressional Record: April 21, 1999 (House)] [Page H2242-H2243] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr21ap99-112] U.S. POLICIES RESTRICT GROWTH OF CERTAIN EXPORTS The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Washington (Mr. Smith) is recognized for 5 minutes. Mr. SMITH of Washington. Mr. Speaker, one of the most important issues we face as a country and will continually face is the issue of economic growth, basic prosperity, creating an economy where all of our constituents can have good jobs that last and enable them to take care of themselves and their family. We must always be thinking of ways to increase economic growth, to increase economic prosperity to provide those jobs. I think that is one of those basic and fundamental services that I think of myself providing for the people I represent in the 9th District of the State of Washington, is to try to help do what we can to encourage a strong economy, and one of the cornerstones of a strong economy is exports. In order to create a possibility for economic growth, we have to have a strong export market, and a few basic facts make this point clear. Ninety-six percent of the world's population lives outside of the United States. But despite the fact we only make up 4 percent of the world's population, we consume 20 percent of the world's goods and services and products. So we can basically look at those figures and realize that if we are going to have economic growth, it is probably going to have to occur outside of the United States. We are going to have to do something to get access to that 96 percent of the world that does not live here. There is massive potential for growth in those markets for all of our products. Technology products, goods, services, you name it, exports are an incredible possibility for growth. Currently we have a number of policies in the U.S. that restrict the ability of those exports to grow, and that is what I want to address the House about today. Now, there are some very good reasons for why these restrictions on exports exist. Unfortunately, as times have changed, those reasons are no longer valid, so it is very important that we reexamine our policy of restricting exports. And there are two that I want to touch on today. One is unilateral economic sanctions, and the second is restrictions that we police on the exportation of certain technologies, certain software and certain computers. When we look at the issue of unilateral economic sanctions, it is important to first look at why we do it. We do it because we want to change the policies of other countries, policies that we are absolutely right in condemning and wanting to change, policies such as restrictions on religious freedoms, restrictions on democratic freedoms, restrictions on economic freedoms, and basic human rights concerns. Unilateral economic sanctions are perceived as one way to get other countries to change those policies. But the problem is we live in a global economy, and in a global economy a unilateral, which means only us, the U.S., placing export restrictions on our companies doing business with other countries, does not get us there because those other countries have dozens of other options. They can go to other countries and get their goods and services elsewhere, and all that happens is that we lose market share and those policies that we are concerned about do not change. Economic sanctions, in order for them to work, must be multilateral in order for them to have full impact. I brought a chart with me today to show my colleagues, in red, the countries that we have placed some sort of economic restriction on. In other words, these are countries that there are some sort of restrictions on U.S. companies exporting to them. These are markets that we are shutting off or reducing access to for U.S. companies. {time} 1445 Mr. Speaker, the important point here is it just does not work. If it worked, if we could actually change human rights policy, change democracy policy, change economic repression through a policy of unilateral economic sanctions, certainly it would be worth doing it, but it does not work. We need to reexamine that policy. Mr. Speaker, we have a bill in the House to do that sponsored by the gentleman from California (Mr. Dooley), who spoke earlier on this issue. I think it is critical that we support that. On technology, we restrict it for a slightly different reason. We restrict it for national security concerns. Perfectly valid concerns, but the question is: Do our restrictions on encryption software and computers actually help national security? I would argue, first, that they do not and, second, that they actually hurt our national security interests. This technology is not something we can put our arms around. It is growing so fast and in so many countries other than the U.S. We are not the only ones making encryption software in computers. Other countries are doing it. Therefore, these countries that we want to restrict access to will get access to it anyway. All we will do is hurt our own companies and hurt their ability to grow. This is not a choice between commerce and national security. In fact, I would argue that our national security could be best enhanced by opening up these markets to our U.S. technology companies so that U.S. technology companies can continue to be the leaders in technology and, therefore, share that technology with our national security interests. We are not going to be able to get the sort of interplay back and forth between the private sector and our defense companies if Germany or Canada or any number of other countries suddenly is out in front of us in technology. We will lose our national security edge. So, paradoxically, the policy of restricting the ability of our technology [[Page H2243]] companies to have access to other markets for goods like computers and encryption software winds up harming our national security policies. The world has changed. It is global, and technology is very accessible. We need to reexamine old policies that no longer accomplish what they set out to do. ____________________