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Update U.S. Export Controls

Outmoded Policies Threaten National Security

Jun. 28, 2010 - 03:45AM   |  
By U.S. REP. ADAM SMITH   |   Comments
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Current U.S. export controls of goods and technologies that have a military use are impairing our national security and undermining American companies' competitive edge around the globe. The existing control regime, which was established decades ago during the Cold War, is intended to protect our national security but is grounded in the past and lacks flexibility for the current environment. It must be reformed.

In fact, it should be a wake-up call that some foreign competitors now advertise products free from U.S. components, and thus, free from our overly burdensome export control restrictions.

The negative impact of this trend cannot be overstated. If international companies are making products such as satellites or complex computer systems free of American parts, this affects not only the American companies producing a competing product but also the dozens of American companies that could have contributed component parts to the foreign company's end product.

For too long, the debate over export controls has been presented as a choice between economic competitiveness and national security. This is a false choice. If the United States does not remain economically competitive in military technology and innovation, it will harm our national security.

Delays and complications from overly restrictive controls on American exports put American workers and jobs at a disadvantage. Hindering our international competition threatens to erode America's position as a leader in military and dual-use goods and technologies. That is why it is imperative that we fix our outdated system of controls.

There is good news, however. After previous efforts at reform that tinkered around the edges, this administration has shown a clear understanding of the issue and is particularly serious about addressing it. It is clear that this time around there is a real chance for broad-based reform.

The impetus for reform is being driven from the top. In response to export control complications, President Barack Obama announced a joint National Economic Council (NEC) and National Security Council (NSC) review of our current export control regime last August. The interagency review spent months before producing recommendations for reforms that would protect American national security while streamlining the process and reducing review time.

While the process of reforming export controls is not new, the commitment and drive to see real reform is. Defense Secretary Robert Gates, Commerce Secretary Gary Locke and other principals involved have been real leaders in the process. They understand the need to maintain our competitive edge while controlling items critical to our national security.

First, simplify the system. The review process for military use items is overly complicated and can take several weeks to several months to process an export license.

Further, the process is frequently criticized for maintaining controls over outdated technologies no longer solely in military use. For example, commercial GPS systems that American drivers can purchase at Best Buy or RadioShack are controlled items that must be reviewed before being exported.

As Gates has argued, the United States reviews tens of thousands of export licenses and approves more than 95 percent of these cases. We need a simplified system that dispenses with easy cases such as GPS and concentrates our resources on the products that truly could present a security threat.

With the NSC/NEC assessment of our current system complete, Gates recently unveiled solid ideas for reform. This includes a three-phase process to implement four major reforms. A single list for controlled exports will be created, the information technology system for controls will be the same across government, a single entity will be responsible for enforcement, and finally, a single licensing agency will eventually be responsible for our export controls.

Congress must now step up to the plate. Lawmakers can no longer ignore the issue. Fortunately, there is movement on reform. The House Foreign Affairs Committee is developing legislation.

What is needed now is for members to understand that it is not a choice between economic competitiveness and national security. We must reform the system to maintain our national security.

As the process moves forward and reform proposals are refined, we must keep in mind that this is about ensuring our industrial base remains the best in the world. Therefore, reform should work for those that use the system. Implementation should include concrete steps for consultation not only with Congress but with our allies and American exporters.

Our allies in Europe, Canada and Australia share our security concerns and have established more effective but simpler systems that both place stringent controls on the most sensitive products and allow for economic competitiveness. Our reforms should be informed by our allies' successes not only to implement a more effective system but to facilitate increased trade for our defense products and remove our allies' competitive advantage.

Reforming our burdensome system must strike a balance between more stringently protecting highly sensitive exports that would otherwise expose our national security, and allowing U.S. companies to compete with products readily available and legally traded on the global market. Our current regulatory regime hinders U.S. companies, creating the real possibility that one day we may need to rely on foreign companies for our defense needs - and that undermines our national security. We must successfully reform this system.

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Rep. Adam Smith, D-Wash., serves on the U.S. House Armed Services Committee and the Permanent Select Committee on Intelligence.

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