‘PENNY FOOLISH, POUND INSANE‘: CLINTON’S EXPORT CONTROL BILL WILL ABET GLOBAL PROLIFERATION, INCREASED DEFENSE COSTS

(Washington, D.C.): Legislation
introduced two weeks ago by the Clinton
Administration to revamp the
Export Administration Act (EAA) marks a
milestone of sorts: It offers proof
positive of the Clinton team’s
substantial incoherence — if not
outright incompetence — in the
conduct of national security policy.

This legislation will drastically
reduce the scope and effectiveness of
U.S. strategic export controls. By so
doing, it will inevitably facilitate the
proliferation of weapons of mass
destruction and related technologies. And
yet, in presenting it before the Senate
Banking Committee on 24 February, five
senior officials from the Commerce,
State, Defense and Energy Departments and
the Arms Control and Disarmament Agency
blithely assured the Congress that this
legislation would actually serve to strengthen
U.S. nonproliferation policy.

In a press conference held the same
day for the purpose of unveiling the
Administration’s export administration
initiative, Secretary of Commerce Ron
Brown was rather more transparent:
Stressing the single-minded purpose
behind this bill (i.e., the promotion of
U.S. exports and jobs), Mr. Brown
characterized it as “mov[ing] us in
the direction of focusing [on] exports as
an engine for economic growth.”⁽¹⁾

If there were any lingering doubt that
national security considerations might
yet be allowed to interfere with the
pursuit of this objective, Secretary
Brown dispatched them by simultaneously
announcing an “unprecedented,”
wholesale decontrol of computers and
supercomputers. This would,
“eliminate…the need for rigorous
supercomputer safeguard conditions on
[most] computers,” ⁽²⁾
according to Secretary Brown’s press
release. In other words, in the
name of promoting the sales of U.S.
supercomputers and related jobs, the
United States will forget about trying
to impede proliferators’ access to many
extremely powerful machines, machines
that represent highly prized tools for
designing and executing nuclear weapons
and related programs.

Another Instance of
Betrayed Campaign Promises

The fact that the Clinton export
decontrol initiatives entail an utter —
and potentially quite dangerous —
disregard for the national security
implications of such measures is
particularly ironic. After all, in the
1992 campaign, the Clinton-Gore ticket
made much of the Bush Administration’s
failings in this area to dispute the
Republican claim to mastery of foreign
policy and to burnish relevant Democratic
credentials.

For example, then-Vice Presidential
candidate Al Gore rightly excoriated the
Bush Administration for its lax export
control policy:

“[President Bush]
accelerated…the sale of weapons
technology to Iraq — right up until
the invasion of Kuwait — in spite of
repeated warnings that anyone with
common sense would have had no
difficulty understanding….[W]hen
Iraq’s ambassador complained that our
Defense Department was taking too
long and being too cautious about
export licenses for high tech items,
Bush apparently agreed with
him that the Defense Department was
being capricious and had to get with
the program.” ⁽³⁾

A Flawed Conceptual
Framework and a Leap of Faith

Once it took office, however, the
Clinton Administration exhibited
essentially the same intolerance for
cautious and often time-consuming
national security reviews of sensitive
export license applications. Lest the
Defense Department not “get with the
program” concerning the new team’s
commitment to the liberal transfer of
strategic technologies, a series of steps
were promulgated aimed at sharply
limiting the Pentagon’s opportunities to
examine — or otherwise interfere with —
export applications.

Preeminent among these was the
dismantling of the Coordinating Committee
on Multilateral Export Controls (COCOM),
a voluntary multinational organization
designed to develop and oversee a common
Western approach to controlling strategic
technologies. In the 1980s, COCOM became
an indispensable vehicle for the Pentagon
to promote and seek enforcement — both
at home and abroad — of prudent
export control arrangements. While the
organization was, regrettably,
considerably weakened during the Bush
Administration, it remained an important
impediment to the hemorrhage of dangerous
technologies to the former Soviet Union
and other “proscribed
destinations.”

Nobody Here But Us
‘Partners for Peace’

The fact that it became
“politically incorrect” to
continue to regard Russia as a potential
adversary offered the Clinton
Administration a pretext for destroying
COCOM and ending the inhibiting effect it
had on “U.S. exports and jobs.”
As Under Secretary of State Davis put it
in written testimony submitted to the
Senate Banking Committee on 24 February:

“The end of the Cold War, the
disintegration of the Soviet Union,
deep cuts in the strategic arsenals
of both sides and the goal of
assisting economic and political
reforms in Russia and the other newly
independent states…all led us and
our allies to the view that the
[existing multilateral arrangement,
COCOM] had outlived its strategic
rationale and could no longer be
sustained.”

This premise was echoed by Acting
Commerce Under Secretary Barry Carter,
who told the Congress at the same
hearing:

“We believe that we must make
a clean break with the past Cold War
focus of export controls. The old
model of a distinction between
COCOM-based national security
controls and other foreign policy
concerns is no longer useful in the
post-Cold War period….Russia
is no longer viewed as an adversary
but as a potential ally in combatting
the proliferation of dangerous
technology.”

Such statements ignore two fundamental
realities: (1) Russia continues
aggressively to pursue the acquisition
and diversion of strategic technologies
for its own purposes. And (2) Even if
that were not a concern, Russia is unable
— and possibly unwilling — to prevent
would-be proliferators from using its
territory as a conduit for others to
acquire otherwise prohibited technology.

Russian Realities

Russian Technology
Acquisitions: Still Dangerous After All
These Years: During the 1970s,
thanks in large part to lax U.S. export
controls, the former Soviet Union was
able to execute a massive, global
technology acquisition program. It had
the effect of seriously eroding the
West’s military advantages in many
strategic areas. A 1985 Defense
Department report to Congress documented
in great detail “the Soviets’
successes in supplementing their military
research and manufacturing capabilities
and in narrowing the technology gap with
the West, thereby eroding the
technological superiority on which U.S.
and allied security depend.” ⁽⁴⁾
In no small measure, the United States
was compelled to undertake a significant
defense build-up in the early 1980s to
redress this situation.

Importantly, notwithstanding the end
of the Cold War, the acquisition of U.S.
militarily significant technology remains
a primary objective of the former Soviet
Union. In a CNN interview on 23 February
1994, former CIA Director Robert Gates
observed:

“The Russian military
intelligence service, the GRU, is
probably more aggressive today
against American targets than they
were before the collapse of the
Soviet Union. They’re after
technology, they’re after
information, and obviously, they are
interested in penetrating our
intelligence services.”

Fortunately, thoughtful Members of
Congress are beginning to question the
Clinton Administration’s dangerously
misplaced belief in the reliability of
Russia. For example, on 2 March, Sen.
Richard Lugar (R-IN) told “the
MacNeil-Lehrer NewsHour” that: “I
would agree that we cannot be thinking in
terms of a partnership [with Russia]. We
really have a very strenuous rivalry
going on.”

Russia as a Conduit for
Proliferation: As the Center for
Security Policy has repeatedly warned,
the danger of Russian abuse of Western
technology aside, there is no basis for
confidence that Russia can adequately
safeguard such technology from retransfer
and misuse elsewhere.⁽⁵⁾
So grave is this problem that, even
though the Clinton Administration is
determinedly
“looking-the-other-way,” some
officials have felt constrained to serve
warning — albeit it a very understated
one — to Congress. For instance, John
Keliher, Director of the Department of
Energy’s Office of Nonproliferation and
National Security told the Senate Banking
Committee on 24 February:

“…A fully implemented
multilateral regime [that replaces
COCOM and includes Russia] will face
continuing concerns over the
effectiveness of export controls in
the newly independent states of the
former Soviet Union….Much
remains to be done…before it can be
confidently assumed that nuclear
related exports to the former Soviet
republics will not be re-exported to
potential proliferants.”

Such concerns presumably prompt the
Clinton Administration to claim, as Lynn
Davis put it on 24 February, that it is
committed to “an orderly transition
in which the [COCOM] arrangement will be
closed down with care and a new regime
established to respond to the new
security threats.” Unfortunately, no
such regime is in sight — let alone an
orderly transition to it. To the
contrary, at the end of March COCOM will
shut down and the Administration is
unable to do more than say, as Barry
Carter did at the same hearing, that
“It is difficult to predict with
certainty the ultimate arrangement that
will emerge.”

No Better on ‘North-South’
Proliferation

No less coherent than the
Administration’s understanding of the
abiding dangers inherent in Russian
diversions of strategic technologies
(so-called East-West technology flows) is
its grasp of the contribution export
controls make in combatting proliferation
among third-world nations (North-South
technology flows). On the one hand,
Secretary Carter claims that, “With
the Cold War ended, the [Export
Administration] Act needs to be refocused
on the security threats that we will face
into the next century — the
proliferation of weapons of mass
destruction and the challenges facing our
own economic security.”

On the other, Secretary Davis
maintains that one of the
Administration’s “objectives”
in rewriting the drafting the legislation
is EAA is to “remove disadvantages
placed on U.S. exporters by the lack of
adequate multilateral coordination on
sensitive transfers to terrorist states
and other threats.” And Under
Secretary of Defense Frank Wisner went so
far as to tell the Senate Banking
Committee on 24 February that export
controls are not that critical in an
effective nonproliferation strategy:

“…Export controls are not
the strongest weapon in our arsenal
to fight proliferation….[Iraq]
showed that it was capable of a wide
range of technological feats, such as
uranium enrichment and ballistic
missile production, with only limited
outside technical support.”

Interestingly, David Kay, head of the
International Atomic Energy Agency’s
inspection team in Iraq following the
Persian Gulf War, concluded otherwise. In
his own testimony before the Senate
Banking Committee on 27 October 1992, Kay
stated:

“The volume of U.S.-produced
equipment is not great when measured
against the multibillion dollar scale
of [Iraq’s] nuclear weapon program.
On the other hand, it was modern and it
was essential to the Iraqi effort….
No one sold Saddam a nuclear
weapon…but a lot of people sold him
equipment that put him frightfully
close….It should be acknowledged
that technological information from
the United States formed the
foundation of Iraq’s initial uranium
enrichment program.”

Key Weaknesses in the
Administration’s Export Control
Initiative

In addition to the legislation’s
inherent conceptual defects, the bill as
introduced has the following fatal
shortcomings:

• Full Membership for All
  ‘Supplier’ Countries.
  The Administration’s bill would
  replace COCOM with a multilateral
  organization that would not only
  include Russia but any
  “supplier country”
  as members. Such a definition
  would certainly include China —
  one of the world’s most notorious
  proliferators. Even North Korea
  and Iran might shortly claim
  eligibility insofar as they are
  not only end-users of diverted
  strategic technologies but
  “suppliers” of such
  items to others.

If past COCOM practice is any
guide, member countries will be
able to garner invaluable
intelligence from their
participation in the new
multilateral arrangement. For
example, they would be routinely
exposed to discussions of: the
utility of certain dual-use
technologies for sensitive
military applications; weak links
in national or multinational
export controls; gaps in
enforcement and ways they can be
exploited; etc.

• New Rights for Industry
  to Petition for Relief from
  Export Controls. This
  section of the legislation could
  effectively gut all export
  controls by affording industry,
  for the first time, the right
  to petition for relief from
  export controls. The bill enables
  exporters to claim damage based
  on one of either three criteria:
  (1) There is foreign availability
  or items are expected to become
  available in the foreseeable
  future. (2) Differences in U.S.
  controls versus those imposed by
  another government place the
  petitioner at a competitive
  disadvantage. Or, (3) the export
  controls are deemed
  “ineffective.”

It is hard to imagine
a case where at least one
of these three conditions cannot
be said to apply. Once
such a petition is filed, the
Secretary of Commerce has 120
days to ascertain the merits of
the case and make a finding. If
no decision is taken, the export
control is automatically removed.
As a practical matter, this
provision alone could accomplish
the wholesale gutting of any
remaining export controls.

• ‘Closing the Barn Door.’
  The legislation will also require
  that a formal evaluation of the
  costs and benefits of any
  unilateral controls be undertaken
  before such controls are
  imposed, to include a formal
  notification to Congress. As a
  result, the Defense Department or
  any other agency will be
  prevented from imposing controls
  on new technologies, regardless
  of their utility to the
  manufacture of weapons of mass
  destruction or other dangerous
  purposes, until a
  “formal” study is
  undertaken and completed.

In the meantime, such a
technology is free to proliferate
and become widely available
elsewhere. This will give rise,
under the terms of the
Administration’s bill, to a
Catch-22: Even if a formal study
were to find it prudent to impose
unilateral controls, industry
would likely be able to file a
petition for decontrol on the
grounds of foreign availability.

• An Effective End to
  Unilateral U.S. Export Controls: Any
  export controls — including
  controls applied in the name of
  advancing U.S. foreign policy,
  nonproliferation, or national
  security objectives — will be
  very difficult, if not
  impossible, to impose unless
  they are adopted multilaterally.
  Thus, trade embargoes of any sort
  are unlikely to be instituted
  unless agreed to by the
  “multilateral”
  community. As long as other
  nations are unwilling to exercise
  restraint (for example, Germany
  in selling chemical
  weapons-related technology to
  Libya, Iran and Iraq), even
  exports that could make
  significant contributions to the
  military potential of a
  terrorist-supporting state will
  be allowed, provided only that 30
  days notice is afforded the
  Congress.

The Bottom Line

The Center for Security Policy finds
the Clinton Administration’s Export
Administration Act seriously deficient.
If permitted to be enacted in its present
form, this legislation would exacerbate
present and foreseeable problems the U.S.
faces in dealing with the proliferation
of weaponry of mass destruction.

At a minimum, the Administration’s
approach offers the Kremlin an
unwarranted veto in the export
control arena, a veto comparable to that
it foolishly granted Moscow concerning
extending NATO membership to the fragile
democracies of Eastern Europe. At worst, it
will compound the deleterious effects
already being felt due to Bush-Clinton
defense budget cuts — and likely set the
stage for vast new spending on U.S. and
allied forces in order to restore the
West’s needed qualitative edge.

The Center joins Republican
and Democratic members of the Congress
and competent private sector experts (of
both liberal and conservative
persuasions) in urging that the
Administration’s EAA be rejected out of
hand. This is a time, instead, for
legislation that would genuinely
strengthen strategic export controls
— not merely pay lip service to doing so
while actually gutting such controls.

– 30 –

1. In point of
fact, the Clinton Administration — like
some of its predecessors — has bought
into a false choice between
exports and jobs on the one hand and
prudent export controls on the other.
Consider the relevant statistics,
disclosed by Under Secretary of State
Lynn Davis in Senate testimony on 24
February:

“In the mid-1980s, during the
height of the Cold War, the United
States government reviewed about
120,000 dual-use licenses per year.
Last year, only 27,000 licenses
required review….As for the U.S.
export control process…the vast
majority of dual-use license cases —
approximately 97 percent — are
processed within statutory timelines.
Of the 27,000 dual-use
licenses that were reviewed last
year, only 145 cases required
interagency review at the Assistant
Secretary level.”

2. Applies to
supercomputers operating up to 1500
million theoretical operations per second
(MTOPS) — an eight-fold increase over
presently controlled levels (195 MTOPS).
Discussions on a further
increase to 2,000 MTOPS are ongoing.

3. Speech by
Senator Al Gore before the Center for
National Policy, 29 September 1992
entitled “Iraqgate: George Bush’s
Foreign Policy Blunder: Is This What We
Expect from a Commander in Chief?”

4. U.S. Department
of Defense, Soviet Acquisition of
Militarily Significant Western
Technology: An Update, September 1985, p.
1.

5. For example,
see the Center’s Decision Brief,
Sorry Boris: COCOM
Restrictions Are Not Cold War Relics But
Vital Anti-Proliferation Measures,
(No. 93-D
51, 22 June 1993) which reveals the
woeful inadequacy of Russian export
control arrangements (e.g., lack of
customs inspectors, licensing
authorities, legal framework,
computerized data bases, etc.)