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U. S. Department of
Commerce
Bureau of Export Administration
Statement of R. Roger
Majak
Assistant Secretary for
Export Administration
U.S. Department of
Commerce
Before
the
Subcommittee on International
Trade and Finance
Senate Banking, Housing, and Urban Affairs
Committee
on
Nonproliferation Regines
March 16, 1999
Mr. Chairman, members of the Committee, thank you for this opportunity to
discuss the multilateral nonproliferation and export control regimes which
form the basis of America's export controls. A full understanding of the
role and strengths of these regimes is necessary as the Committee works on
creating a renewed Export Administration Act to meet the needs of the next
century.
I would like to provide the Committee with a brief description of the four
multilateral regimes: the Missile Technology Control Regime (MTCR), the Nuclear
Suppliers Group (NSG), the Australia Group (AG) for biological and chemical
weapons, and the newest regime, the Wassenaar Arrangement for conventional
arms and related dual use technologies. In reviewing the four regimes, I
will set forth their common elements and provide an assessment of their
effectiveness in countering the proliferation of weapons of mass destruction
and the spread of advanced conventional arms. While addressing all the
multilateral regimes, I would like to focus on the newest one--the Wassenaar
Arrangement, as there has recently been much discussion about its effectiveness
and the role it plays in furthering U.S. interests.
Your interest in the activities of the multilateral control regimes is timely.
The spread of technology around the world, a phenomena sometimes called
globalization, means that the United States is constrained in ways that it
never was before when it comes to the effectiveness of unilateral embargoes,
export controls or licensing policies. As technology is increasingly available
to other nations and the production base for high tech items spreads to other
areas of the globe, cooperation with our regime partners not only sets the
limits for effective export controls but becomes the essential ingredient
to an effective nonproliferation policy.
In addition, a well coordinated, focused export control program ensures that
U.S. companies will be able to engage in legitimate trade and to compete
effectively in the international market place. This in itself is an important
national security issue. Today, our military relies on a strong high tech
sector to continue to develop and manufacture new and better products. Yet
it does not buy enough by itself to keep them healthy. Instead, in a globalized
economy, exports have become the key to growth and strength for the industries
critical to our defense forces.
As our military continues its transition to Commercial Off the Shelf items
(COTS), due to the inability of military procurement of specially designed
items to keep up with fast changing commercial technologies (particularly
electronics), the civilian sector will increasingly drive advanced weapons
development. Our future military strength is directly tied to the health
of the civilian companies that produce the products it buys. The equation
is simple: exports = healthy high-tech companies = strong defense. Cripple
our companies by denying them the right to sell through ill-advised export
control policies, and our own military development is handicapped.
The Interagency Process
Four U.S. agencies have key roles in determining U.S. objectives and positions
for the multilateral regimes. These are the Departments of State, Defense,
Commerce and, for the Nuclear Suppliers Group, the Department of Energy.
Each agency brings a unique expertise to the international negotiations.
Agencies cooperate in the development of U.S. positions on what should be
controlled by each regime, the licensing policies and practices that should
be followed, the types of information that should be shared among member
countries, and the procedures for cooperating on investigative matters. U.S.
positions are usually arrived at by consensus among agencies. However, if
disputes arise, their resolution and overall coordination are the responsibility
of the National Security Council.
With its team of industrial experts, Commerce provides key technical advice
on the state-of-the-art of various industries as well as the economic and
trade consequences of changes to dual-use control thresholds. These are essential
ingredients to the development of meaningful U.S. negotiating positions,
as trade and economic competitiveness issues often figure highly in other
regime members negotiating positions. After negotiations are completed and
international control levels and procedures agreed, Commerce is responsible
for promulgating the implementing regulations, managing the interagency licensing
process, and providing the business community with information through
publication and seminars on its rights and obligations under the new rules.
Commerce also provides many of the experts for technical and outreach activities
of the multilateral regimes. This process has been in place for many years
and works well.
The Regimes
Let me now turn to a brief overview of the multilateral export control regimes.
Building multilateral institutions to allow like-minded nations to cooperate
in addressing international issues has been a central element of U.S. foreign
policy in this century. The best examples of this include the United Nations,
NATO, and the World Trade Organization. For arms control , the United States
participates in four groups of like-minded countries. Each of the four regimes
are the result of diplomatic efforts to develop common approaches among partners
to commonly perceived security threats--chiefly the spread of weapons of
mass destruction.
In the beginning, the membership of these regimes was primarily among our
Western allies. One of the successes of this Administration has been, in
light of the end of the Cold War, to broaden membership and to include our
former opponents from the Warsaw Pact nations. This has significantly
strengthened the regimes by including more supplier nations. The four regimes
are:
The Nuclear Suppliers Group (NSG). Following the 1974 explosion of a nuclear
device by India, the United States proposed the formation of an informal
group of nations concerned with the proliferation of nuclear weapons. While
initially the NSG focussed only on nuclear materials, under U.S. leadership
in the early 1990s, the NSG expanded its control list to include dual-use
items needed for the production of nuclear weapons. Controls are focused
on two categories of goods: nuclear material, equipment and technology unique
to the nuclear industry, and so-called nuclear dual use items that have both
nuclear and non-nuclear commercial applications. In 1992, the NSG published
Guidelines and an Annex setting forth how members should proceed in imposing
restrictions on affected exports and listing the items that each member nation
should make subject to export controls.
The Missile Technology Control Regime (MTCR). The United States and six other
countries created the Missile Technology Control Regime in 1987 to limit
the proliferation of missiles capable of delivering weapons of mass destruction.
Its membership has expanded markedly since then. The MTCR, like the NSG,
is not a treaty-based regime, but a group of countries that have agreed to
coordinate their national export controls to prevent missile proliferation.
The MTCR has been strengthened in recent years by the willingness of a number
of nonwestern countries to either join the MTCR or to adhere to its guidelines
and controls.
The Australia Group (AG). The Australia Group was formed in reaction to the
Iran-Iraq war when it became evident that Iraq and Iran had used chemical
weapons in violation of the 1925 Geneva Protocol. In 1985, Australia called
for a meeting of like-minded supplier countries to consider harmonizing export
controls on precursor chemicals for chemical weapons. This group subsequently
extended its scope of concern to include controls on chemical production
equipment and technologies that could be used for chemical weapons. In 1990,
the scope of the AG was further extended to include measures to prevent the
proliferation of biological weapons. Today, Australia Group countries cooperate
in curbing the proliferation of chemical and biological weapons through the
coordination of export controls and an exchange of information.
The Wassenaar Arrangement. With the end of the Cold War, COCOM, the venerable
cold war institution which blocked the transfer of high tech items to the
Soviet Union, was seen by many NATO Allies as no longer necessary. Russia's
new government also asked for an end to cold-war era trade restrictions.
However, the Clinton Administration was concerned that the elimination of
COCOM would leave a serious gap in multilateral export controls, permitting
the uncontrolled sale of advanced conventional arms and related dual-use
production equipment to countries of concern, namely Iran, Iraq, Libya, and
North Korea. Former COCOM members were joined by the Russian Federation,
the Czech Republic, Hungary, Poland, the Slovak Republic, Argentina, the
Republic of Korea, and Romania in the new multilateral regime. The objective
of the Wassenaar Arrangement is to ensure that member states' national export
policies do not contribute to the development or enhancement of destabilizing
conventional military capabilities, primarily by promoting transparency in
the transfer of both arms and dual-use goods and technology.
Common Elements
Each of the regimes has a different task. However, if we look at them, a
number of common elements emerge. I am not suggesting that there should be
one common regime - one size does not fit all when it comes to proliferation
problems. But international diplomatic practice has evolved a set of parameters
within which the nonproliferation regimes operate. Let me describe these
parameters, given the central role that multilateral controls must play in
any new Export Administration Act.
First, it is important to note that the four regimes are not based on treaty
obligations, unlike NATO or the U.N., for example. They are based instead
on agreements and informal arrangements reached among like-minded nations.
While this means that none of the regimes are binding under international
law, each of the members treats its regime obligations as a binding international
commitment. Each regime also operates on the basis of consensus in developing
or amending guidelines, procdures, and lists. All members must agree to any
change before a new item can be controlled or a new objective adopted by
the regime.
Second, each of the regimes has agreed procedures and control lists. While
the procedures differ widely from regime to regime, they guide both regime
activities and member states' national policies in controlling the export
of agreed lists of goods and technologies. However, in implementing the
procedures and lists, each regime operates under the principle of "national
discretion." This means that each member can decide how it will carry out
regime obligations. None of the four regimes has a COCOM-style veto over
exports. In COCOM, proposed exports were vetted among the members. If one
objected, the export was denied. Member nations were willing to cede this
element of their sovereign power in 1949, when COCOM was created, because
of the grave and immediate risk posed by Stalin to the West. Since that time,
no other regime, whether founded in the 1970s, the 1980s or the 1990s, has
had the veto.
"National discretion" is guided, of course, by consultation and information
exchange among regime members and each member must be able to defend its
implementation as consistent with its regime obligations. At the end of the
day specific export control decisions are the prerogative of each individual
member.
Third, in the absence of a veto, increased cooperation and information sharing
among regime members becomes essential. Regular meetings are held in each
regime to coordinate the activities of the members. A key part of these meetings
is the exchange of information, often sensitive, on projects of proliferation
concern, acquisition programs by proliferator states and other useful
information. In addition, several of the regimes have formal procedures for
the exchange of information on export licenses. The most common is notification
of denials. When one partner has formally denied an export because of a concern
that it might be contrary to the purposes of the regime, it will notify the
other members so that they can deny a similar request. In the MTCR, NSG,
and AG, this denial notification is buttressed by a "no undercut" rule. Wassenaar
members also has a "no undercut" provision, but it needs to be strengthened.
In Wassenaar, there is a post-facto exchange of exports of "sensitive" dual
use technologies and a more limited exchange of information on arms transfers.
Finally, all members maintain their own national export control systems to
carry out their commitments to the regimes. While in the U.S. there can be
disagreements among agencies over how best to implement the regimes in our
national practices, and while the U.S. frequently does more than other regime
partners, we are careful to ensure that our export policies and regulations
are not contrary to our regime commitments.
Effectiveness
Effectiveness is in the eye of the beholder, but most beholders would agree
that each of these regimes, within the limits of what they were designed
to do, have made important contributions to nonproliferation and national
security. In particular, the regimes have acted to reinforce and strengthen
the norms of international behavior, wherein responsible states do not attempt
to acquire weapons of mass destruction or destabilizing accumulations of
conventional arms. The export control regimes have built on the experience
of many nations to develop stronger, focussed export controls.
The regimes are also effective in ensuring a degree of commonality in national
export controls which would not exist in their absence. They also provide,
through information exchange, regular meetings and informal consultations
among members, a means for coordinating an international response to particular
proliferation problems. The regular meetings provide a basis for information
exchange, diplomatic actions and the furtherance of U.S. policy objectives.
The U.S. has used the regimes to argue strongly for the adoption of "catch-all
controls" by other regime members, and many, but not all, have adopted similar
controls. Catch-all controls allow the U.S. to stop the export of uncontrolled
items if destined for a proliferator. The U.S. broadened its "catch-all controls"
in 1991 as part of the Enhanced Proliferation Control Initiative (EPCI),
and continues to encourage the implementation of such controls as an adjunct
to multilateral non-proliferation efforts.
The regimes offer an opportunity to establish shared parameters for control
and provide a vehicle for the continued efforts of the U.S. to encourage
our partners to follow similar licensing requirements and policies. They
provide consultative mechanisms for experts to discuss the technical reasons
for controlling particular items. In this way, the lists of items controlled
can be updated and refined to reflect technical developments and international
trade.
Regime members recognize that they are not the only sources for controlled
items. Consequently, the regimes pursue bilateral and multilateral outreach
and transparency initiatives to encourage non-members to strengthen their
export controls. In this regard, the work of some of the regimes, such as
MTCR, to establish outreach programs, whereby the member states meet with
nonmembers to train them in more effective export controls and to discuss
issues such as the transhipment of goods, have proved particularly useful.
The U.S. does face some problems in our cooperation with other regime members.
Since regime members implement the controls on the basis of national discretion,
there can be an uneven application of controls because member governments
can apply differing procedures, policies or targeted countries for licensing
decisions. On occasion, economic interests can carry more weight and, in
instances where consensus is weak, some of our partners place economic interests
foremost.
There are real differences of opinion among regime members as to whether
there can be any legitimate trade with proliferator nations. While the U.S.
may view all trade with countries like Iran or Libya as potential contributions
to WMD programs, our partners do not share this perspective and see opportunities
in these countries for legitimate trade. When the U.S. can convincingly
demonstrate that a proposed export will contribute to a program of concern,
our regime partners will generally support our denials. When our concerns
are more diffuse or our arguments tenuous, our partners are unlikely to defer
to our views. "No undercut" provisions can lessen this problem, but it is
not a perfect system. In the NSG, with the exception of Russian nuclear supply
to Iran, there has been excellent cooperation among members in the application
of strict limits on trade with proliferant nations.
The diffusion of technology around the world means that many controlled products
are widely available from sources both inside and outside of the regimes.
In addition, many of the countries that raise proliferation concerns already
possess an indigenous capability to produce critical materials and equipment.
Consequently, the export restrictions of the regime members alone will not
prevent the diversion of controlled items to prohibited weapons activities
when proliferators are intent on doing so.
While export controls are important they, are but one tool in countering
proliferation. It is clear that by themselves, the regimes cannot prevent
a determined proliferator from pursuing WMD programs. We have the examples
of India or North Korea or Iraq to demonstrate this. Economic globalization
is inevitably weakening controls based only on limiting the supply of technology.
In addition to effective export controls, an effective nonproliferation policy
requires a combination of active diplomacy, regional negotiations, and other
means to reduce the demand for WMD. This is why the U.S. pursues all of these
measures in a coordinated effort to fight proliferation.
This Administration has made significant strides in reinforcing existing
regimes and in building new ones in a security climate much less disposed
to cooperation than was the case ten years ago. We have been criticized by
some in the nonproliferation community for not doing enough. I believe that
this criticism is based on an unwillingness to accept that consensus and
persuasion determine the bounds for what can be done with export controls.
Where consensus is high and our arguments persuasive, the regimes have had
good effect. This is especially true for those regimes concerned with the
proliferation of WMD. One of the best ways to strengthen export controls
is to continue the work to expand the area of consensus in the regimes. However,
in areas where our partners do not share our security concerns, cooperation
has been less forthcoming.
The Wassenaar Arrangement
Of all these regimes, the Wassenaar Arrangement (which controls conventional
weapons and related technologies such as computers, satellites, and machine
tools) has achieved the least multilateral consensus on what needs to be
controlled and to whom it needs to be denied. This lack of consensus limits
coordination among regime members and has serious implications for our national
export control policies and regulations. In large part, this reflects the
challenge the U.S. and its allies face in replacing outmoded cold war policies
and procedures with viable security strategies attuned to today's international
environment.
Wassenaar is sometimes compared unfavorably to COCOM. When critics point
out that Wassenaar is weaker than COCOM (in its prime), they neglect to mention
that in many aspects Wassenaar does not differ greatly from the other
nonproliferation regimes. Where it suffers in comparison to MTCR, NSG or
the Australia Group is in the differing views among Wassenaar members over
what constitutes legitimate trade in the items Wassenaar controls. In the
other regimes, there is general agreement that there should be no trade in
WMD and no support for WMD programs. The same is not true for Wassenaar,
which is focused on conventional arms and related dual use production equipment.
Here, there is no international "norm" accepted by responsible states which
prohibits trade in conventional arms, as there is for WMD.
Wassenaar has the most extensive control lists of all the regimes. Most of
the industrial equipment it controls is traded widely and legitimately in
commercial markets. As for conventional arms and related technologies, there
is general agreement that, unlike WMD, it is legitimate to sell arms when
the sale strengthens the recipient's capacity for self defense and is in
concert with the seller's security interests.
The stated objective of Wassenaar is to prevent destabilizing buildups of
conventional arms and related dual use technologies. There is a common
understanding in the regime that four countries -- Iran, Iraq, Libya and
North Korea-- require particular scrutiny, and there is a commitment among
Wassenaar members to deny sensitive exports to military programs in these
countries. Wassenaar has had some success in this area, particularly in denying
advanced conventional arms to Iran. However, denying arms or industrial equipment
to other areas of the world, such as China, has never been one of Wassenaar's
stated goals. And, those who would judge the success of Wassenaar by such
a measure have set up a straw man that dooms Wassenaar to failure. Even if
the U.S. were to propose to deny sales to China as a goal, our partners in
Wassenaar have repeatedly said that China is not a target of the regime.
We have numerous examples of our partners selling to China a Wassenaar-controlled
item which we have denied. Indeed, given the global diffusion of technology,
it is not clear that any regime could prevent China from obtaining the advanced
technologies controlled by Wassenaar.
Wassenaar members have agreed that one of the tasks for the Arrangement in
1999 is to review the effectiveness of the regime. The U.S., as part of this
review, is looking for ways that Wassenaar could be strengthened. We will
seek to increase transparency, especially in regard to arms transfers, and
strengthen the no-undercut provisions. What we will not do, given the consensus
rule that governs the regime and the oft-expressed views of our allies, is
seek to establish a veto procedure or to treat China like Iraq or Iran. Our
experience in this regime and others suggests that these proposals would
have no chance of success and would damage our credibility on other important
nonproliferation issues. Any reauthorization of the Export Administration
Act will need to take these real world limitations into account.
Conclusion
The ability of the four nonproliferation and export control regimes to enhance
global security will be influenced by the energy and resources that the U.S.
is willing to devote to this task. There is no secret formula that will totally
prevent the export of dual-use items that could be used for strategic or
proliferation purposes. What we can do is raise the cost of WMD by winning
agreement among industrial nations to exercise tight controls on critical
items. Our own national implementation of these multilateral controls is
and will continue to be a model for others.
When the Export Administration Act was last authorized, the U.S. faced a
much greater threat to its national security than it does now. The past threat
posed by the Warsaw Pact gave a certainty and a coherence to our export controls
-- both national and multilateral. However, by consensus among our regime
partners, the multilateral basis of our national export controls is no longer
a single, cohesive, overarching organization of allies. Instead, it is a
set of regimes whose goals are to reduce the proliferation of weapons of
mass destruction rather than to preserve Western (or U.S.) military superiority
over a rival bloc through technology denial.
This Administration has had considerable success, building in part on the
work of its predecessors, in creating a set of international norms whereby
responsible nations restrict exports to programs related to weapons of mass
destruction or to destabilizing military buildups. Even so, it is more and
more difficult to restrict access by a determined nation to the technologies
needed for very capable weapons. I commend this Committee for taking up the
challenge of designing a new Export Administration Act to reflect that changes
that have taken place in the world since 1988, when the last EAA was
enacted.
This concludes my prepared remarks. I would be pleased to answer any questions
that the Committee may have.
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