Washington, DC ? Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN) will testify before the Senate Committee on Commerce, Science, and Transportation at a hearing on S. 1712, the Export Administration Act.
Tuesday, April 4, 2000
253 Russell Senate Office Building
Chairman Thompson, a strong believer in free trade, advocates the need for a balance between trade and national security. If anything, however, rather than loosening national security export controls, Senator Thompson believes we should be closing some of the loopholes opened by the Clinton Administration — even as we improve the ways we administer the export control system so to ensure that export license applications are processed as rapidly and efficiently as possible.
Because of its significant national security implications, Thompson urges Congress to postpone consideration of S. 1712 until next year, when a new President can work with Congress to find a responsible solution that balances trade and security.
Chairman Thompson’s prepared testimony
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.