Statement by
Senator Fred Thompson (R-TN)
before the Senate Commerce, Science and
Transportation Committee on
The Export Administration Act of 1999
April 4, 2000
Later this year, the
Senate may consider the Export Administration Act (EAA) of 1999. This
legislation, whose predecessor expired in 1994, establishes export licensing
policy for "dual-use" items—equipment, materials, technology, and
know-how that can be used for both commercial and military purposes. In the
wrong hands these items can be used to build weapons of mass destruction (WMD),
ballistic missiles, and other military-related items that threaten the United
States.
The EAA’s sponsors
argue that this bill brings the United States’ export policies out of the Cold
War era and adapts them to the strategic and commercial realities of the 21st
Century. They contend that this bill protects national security while freeing
American businesses to remain competitive in the global marketplace. I disagree.
The world today is
different than it was ten years ago. The collapse of the USSR reduced tensions,
opened new markets, and set the stage for dynamic growth in global trade. The
integration of economies, linked to growing markets abroad, and the increasing
availability of advanced technologies have made it more and more difficult to
try to "control" these "dual-use" items for national
security reasons. Nowhere has this tension been more pronounced than in the
computer industry.
But since the end of
the Cold War, the threats to our country have actually increased due to
the proliferation of weapons of mass destruction and the means to deliver them.
This has been verified repeatedly by the U.S. Intelligence Community and outside
groups like the Rumsfeld and Deutch Commissions. These threats have been
advanced in large part due to the misuse or diversion of sensitive "dual
use" items—such as high performance computers (HPCs) and advanced machine
tools---that are often critical to a weapon’s construction, development, or
testing.
Take, for example,
the People’s Republic of China (PRC), which has been described by the U.S.
Intelligence Community as perhaps the worst proliferator of WMD and missile
technologies in the world. According to the Cox Committee report, HPCs are
essential to China’s nuclear weapons, ballistic missile, intelligence
collection and other military programs. The report adds that "The PRC is
convinced that the United States has the most advanced HPC technology" and
that the PRC "seeks to acquire as much of it as it can" for its
military programs.
The Cox Committee
report also stated that the Clinton Administration’s relaxation of US export
controls, poor administrative oversight, and failure to investigate and punish
export violators have made matters worse. It is no secret that the licensing
requirements for HPCs being sold explicitly for military use to countries
like China and Pakistan, have been raised by the Clinton Administration from
2,000 million theoretical operations per second (MTOPS) in 1995 to 12,500 MTOPS
today, giving the People’s Liberation Army an unprecedented capability to
design and build advanced weapons the United States has yet to field. Even more
outrageous is the fact that ostensibly "civilian" end users in China—as
if there are any---can purchase computers rated at 20,000 MTOPS, which can give
researchers the ability to conduct nuclear blast simulations.
This brings us right
back to the Export Administration Act and the need to balance trade and
security. The problem with the bill reported out of the Senate Banking Committee
is that it codifies the worst practices of the Clinton Administration, and then
liberalizes them even further. It would give unprecedented authority to the
Secretary of Commerce; bind the hands of the President in controlling exports
and conducting foreign policy; and, among other things, create two new legal
categories that would exempt "dual-use" items from export control:
"foreign availability" and "mass market status"—vague and
subjective standards that have been challenged by the GAO and others. In other
words, if a sensitive item is produced abroad or manufactured and
marketed in sufficient numbers here in the United States—such as high
performance computers---this bill would prohibit export controls on sales to
even countries like China or Pakistan.
By assuming that the
threats to our national security are minimal, that "dual use" items
are impossible to control, and that US businesses are suffering under the weight
of onerous export controls, the bill would remove the checks and balances
critical to an effective export control system.
The fact is,
"dual use" items can be controlled. The keys to an effective
export control system are simple: clear rules, trained staff, state of the art
resources, intensive background checks, rigorous post shipment verifications,
and tough enforcement. The Governmental Affairs Committee, which I chair,
discovered in hearings we held last summer that the Commerce Department has
failed on all counts. In fact, out of the 190 high performance computers shipped
to China in 1998, a post shipment verification was conducted on only one of
them. It is absurd to suggest that we should now dismantle our export control
system because this Administration hasn’t bothered to implement it properly.
And even if
sensitive items like high performance computers can be smuggled out of the
country or bought at Radio Shack, this is no reason to allow potential
adversaries or proliferators to buy them in volume----and acquire service and
technical support from our best suppliers. Export licenses not only place
controls on commodities, they are an invaluable intelligence collection
mechanism: they help us track "what" dual use items are being used
for, "who" is using them, and "how" such items might be
configured with other sensitive items to advance a country’s military and WMD
programs. This is important information to have when you are trying to defend
the nation.
Finally, export
controls are not hurting business or dampening the economy. Fewer than 1 % of
all exports today require licenses, and roughly 90% of these license
applications are approved. The Congressional Research Service, Congress’ own
non-partisan research branch, estimates the range of economic loss due to export
controls at only $2 - 4 billion annually, or no more than .04% of our $9.2 trillion
GDP last year. This is a small price to pay for the national security benefits
of making it harder for rogue nations and others to acquire WMD and missile
capabilities----and only a small fraction of what it may ultimately cost to
build missile defense systems and acquire other military hardware necessary to
defend against the weapons these "dual use" items may help create.
I am a strong
believer in free trade. It has been an engine of growth and prosperity for our
great nation since its birth, and has created incredible opportunities for
millions of Americans. But when it comes to national security, we must draw the
line. Rather than loosening export controls as this new EAA does, we should be tightening
them.
Export controls are a complex
issue which require further study and debate. This matter has also been
complicated by the mistrust between the Congress and the Administration with
regard to export controls and trade promotion, especially when it involves China—lest
we forget the Loral/Hughes satellite escapade in 1995-96 that seriously damaged
our national security. Rather than rush a controversial bill, with significant
national security implications, through the Congress in an election year, we
should postpone this legislation until next year, when a new President can work
with Congress to find a responsible solution that balances trade and security. |