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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World II. Findings Each of the committee’s findings is summarized and then discussed in detail in the text that follows. FINDING 1 Designed for the Cold War when the United States had global dominance in most areas of science and technology, the current system of export controls now harms our national and homeland security, as well as our ability to compete economically. In almost all cases, the technology base that supports our national security also supports the high-technology sector of the civilian economy. Many controls imposed in the name of national and homeland security do not, in fact, improve national and homeland security. Many current controls (outside of narrowly defined military niches) aimed at protecting national security, in fact weaken U.S. innovation and competitiveness in global markets, thereby reducing economic prosperity, which is an essential element of U.S. national security. The current system of federal controls on the flow of scientific information developed, by accretion, over almost six decades. It is based largely on the experience of the Cold War years when the United States was confronting a unitary threat from the Soviet Union, and on the conditions of economic and technological competitiveness that existed in the 1950s, 1960s, and 1970s. Although economic and security conditions have changed dramatically, our approach to export controls has
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World persisted, both in substance and in the administrative structures within which the controls are carried out. How Did We Get Where We Are? In response to the numerically superior military forces of the Soviet Union and its Warsaw Pact allies, the United States committed to building a military establishment that fielded qualitatively superior forces. To sustain this “run faster” strategy, the United States invested significantly in advanced research and development in university, industry, and national laboratories to produce superior technology in fielded military systems. As a result, the United States achieved the leadership position in many areas of science and technology. There followed well-documented efforts by the former Soviet Union to systematically collect and exploit for military purposes scientific and technical information produced in the West.1 These efforts were unprecedented in scope and in the resources (both human and financial) dedicated to their implementation. To counter this threat, the United States crafted a system of policies and regulations designed to limit the flow of technology to the Soviet Union and its allies. This system included classification, export controls, deemed export controls,2 restrictions on the dissemination of government-funded research, and limitations on visa and visitation privileges by those who could collect advanced scientific and technological knowledge within the United States. Each of these regulatory requirements was premised on the direct application of particular elements of technology to specific military uses. Moreover, all of these military uses were envisioned, in the U.S. regulatory design, as being wielded by an identified state power—most specifically, the former Soviet Union and its allies. With a common understanding of the security threat they faced, the United States and its allies acted to deny crucial technology to the Soviet Union and the other states of the Warsaw Pact. 1 See, for example, National Academy of Sciences, National Academy of Engineering, Institute of Medicine. 1982. Scientific Communication and National Security (hereafter known as the Corson Report after the panel’s chair, Dale Corson). Washington, DC: National Academy Press, pp. 17-18. 2 Deemed export controls refer to controlling the transfer of technical information to foreign nationals who are studying or working in the United States.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World How Have Global Conditions Changed? The fall of the Soviet Union was a triumph for the West, eliminating the single largest threat to the security of the United States and its allies. However, the demise of the former Soviet Union let loose regional animosities that in some cases had lain dormant under Soviet control, and in others, had been obscured by Cold War geopolitics. At the same time, this dissolution loosened the ties among the countries of the anti-Soviet West that had cooperated with one another out of a common fear of the Soviet Union. This has made it difficult for the United States and its allies to deal consistently with the rise of smaller politically motivated enemies, who in many cases are non-state actors—even mere groups of individuals—and whose size is disproportionate to the nature of the threat they pose. The post-Cold War period is also marked by major changes in world economics that have transformed the international economic landscape. The opening of trade among nations of East and West, combined with advances in information technologies, have made it possible for people, goods, and technology to move freely across formerly closed borders. Well-financed centers of scientific excellence with long-term goals sprang up in South Korea, Singapore, China, and India. The scientific establishments in Europe, Israel, Japan, and more recently, Russia, have realized a new vigor in the post-Cold War global economy. Several countries in the Middle East are now investing to advance their own scientific research capabilities. Many countries—and especially China—are learning to exploit their new scientific strengths by means of globalized business models that take advantage of peer-to-peer initiative structures.3 For many countries, trade policies that fostered economic development became a high priority. The need to control exports for mutually agreed national security objectives no longer dominated the policy agenda of U.S. allies. Meanwhile, multinational corporations based in the United States shifted research and development efforts offshore to accompany the opening of markets, as in China; or to take advantage of lower costs and well-educated English-speaking technical elites, as in India and Ireland. Moreover, innovation itself is becoming increas- 3 See, for example, Lewis M. Branscomb’s article, “Research Alone is Not Enough,” in Science, 321: (1589) (August 15 2008), pp. 915-916 that calls for American policy makers to encourage the development of relational business models.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World ingly international.4 Finally, advances in information, communication, and transportation technologies and a switch to “just-in-time” inventory management have made U.S. industries increasingly reliant on global supply chains whose disruptions, when they occur, hurt the U.S. economy.5 Increasingly, American science and technology lost the dominance that had characterized earlier decades as scientific and technological capacity increased dramatically in other nations.6 The reflexive tightening of security after the September 11, 2001, attacks blunted recognition in U.S. policy of the breadth and depth of the rising competition to American science and technology. The Single Technology Base The technology base of a nation consists of all the elements that contribute to the ability of the nation to develop technology, to field advanced systems, and to compete in technology-based markets; it encompasses people, infrastructure, research laboratories, and manufacturing capacity, as well as science and engineering education capacity. As conditions in the marketplace changed, the separate, and often secret, military technology base that in the 1970s supported the military market gradually merged with the much larger technology base that supported the commercial market. This global commercial market provided enormous incentives for the rapid development of sophisti- 4 Sociologists and economists are uniformly pointing to an increasing interdependence of innovation systems in various countries. This interdependence consists of increasingly complex collaborations across national borders and among researchers and users of research from various institutions. These collaborations allow firms to take advantage of foreign innovation systems for a variety of solutions to technological problems. For an overview of innovation system literature, see Carlsson B. 2006. Internationalization of innovation systems: A survey of the literature, Research Policy, 35: (1), pp. 56-67. Also see Etzkowitz, H., and Leydesdorff, L., 2000. The dynamics of innovation: from national systems and “Mode 2” to a triple helix of university–industry–government relations. Research Policy 29: (2), pp. 109-123. 5 The West Coast dock strike in 2002 that lasted for 10 days had an estimated cost of $15 billion to the U.S. economy. See The Reform Institute’s 2008 report, Global Supply Chain Presents Opportunities and Perils, released March 6, 2008. 6 The 2007 report to Department of Commerce Secretary Carlos Gutierrez from the independent Deemed Export Advisory Committee (hereafter referred to as the DEAC Report), has listed the following areas in which the United States has lost its scientific and engineering leadership: “polymer composites (Germany), 3D optical memories (Japan), bulk metallic glass (Japan), biostatistics/multivariate statistics (France), population biology (UK), adaptive dynamics (Germany/Switzerland), theoretical biology (Netherlands), and solar energy (Japan/Germany).” The DEAC Report, p. 11.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World cated technologies, while the market for specific military applications became relatively smaller.7 As the military market shrank, investments flowed naturally, by market-driven forces, to the civilian sector. More and more of the technologies and components used for war-fighting and intelligence collection came to be based on the same technology that supported the development and production of civilian goods and services.8 The communications that support military situation awareness today are predominantly civilian technology. During Operation Iraqi Freedom (2003), 80% of all satellite communications used commercial satellite services. SOURCE: Cavossa, David, “State of the Satellite Industry”, presentation for the FAA’s Commercial Space Transportation Advisory Committee (COMSTAC), October 25, 2006. Available at http://www.faa.gov/about/office_org/headquarters_offices/ast/industry/advisory_committee/meeting_news/media/COMSTAC_Presentation-SIA_Cavossa.ppt. Innovations came quickly in the 1980s and 1990s—especially in electronics and information technology—and the U.S. military was able to incorporate civilian components, or variants of them, to add functional capability to military systems. By 2000, except for small but important niches in the military sector, components for both military applications and the commercial market were drawn from the same technology base. A key differentiating characteristic in the military market now was not the underlying scientific or technological information, components, or products, but the methods by which these were applied to specific military uses. With the evolution to a single technology base supporting both military and commercial demand came the opening of global markets through political means, such as the loosening of Russia’s grip on its satellite states, the rise of state-controlled capitalism in China, and various world trade agreements. These global markets, although they often 7 The consolidation of the defense industry is in part emblematic of the establishment of a single technology base. In 1993, there were 36 major prime contractors. By 1999, these contractors had consolidated to just 8 prime contractors. A similar consolidation has happened among second-and third-tier contractors with their numbers falling from 85 to 44 in a similar time period. See Bear Stearns, The Consolidation of the Defense Industry: Winners and Losers, February 7, 2000; and Bear Stearns, The Consolidation of the Aerospace Industry/Defense Merchant Supplier Base, April 17, 2000. 8 Defense Science Board, 2006 Summer Study: 21st Century Strategic Technology Vectors, available at http://www.acq.osd.mil/dsb/reports.html.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World started at considerably lower levels, grew at much higher rates than the more mature domestic U.S. markets. These global markets became as important as—and increasingly more important in some areas for U.S. companies—than the market within U.S. borders.9 Despite, or perhaps because of, the merger of the military and commercial technology bases, the U.S. federal bureaucracy redoubled its efforts to prevent the transfer of information, components, and products to potential U.S. adversaries by adding new items to the control lists that could not be exported from the United States without an export license.10 With the tensions that developed after the September 11, 2001, attacks, the licensing process slowed even further. Items rarely came off the lists, even if newer, more advanced developments completely bypassed the technologies on which they were based. In addition, the bureaucracy’s attention to “deemed exports” became more focused.11 Foreign scientists and students in the United States were barred from exposure to export-controlled items unless their host institutions obtained an export license. The Harms Caused by the Current Export Control System If appropriately construed and implemented, export controls (and the derivative “deemed export” controls) constitute a legitimate constraint on commercial activity for the purpose of protecting national 9 Ibid. 10 The one exception is in 1995-1996 when the multilateral forum, the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (hereafter referred to as the Wassenaar Arrangement), was established. The categories of items that were either decontrolled or controlled at more advanced levels included computers, beta-test software, precursor chemicals, and integrated circuits. See the Export Administration Annual Report 1994 and 1995 Report on Foreign Policy Export Controls, U.S. Department of Commerce, Bureau of Export Administration. 11 The National Defense Authorization Act for Fiscal Year 2000 authorized the Inspectors General of the Departments of Commerce, Defense, Energy, and State, in consultation with the Directors of the CIA and FBI, to conduct a multiyear assessment of the adequacy of current export controls and counterintelligence measures to prevent the acquisition of sensitive U.S. technology and technical information by countries and entities. The 2004 reports focused on regulations regarding deemed exports. A total of seven reports were issued in April 2004, including a report from the Department of Homeland Security (established in 2003), and an interagency review summarizing the findings and recommendations of the six individual agency IG reports. Three of the reports—State, DHS, CIA—remain either classified or are publicly unavailable. See in particular Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S., Final Inspection Report No. IPE-16176, March 2004. Available at http://www.oig.doc.gov/oig/reports/2004/BIS-IPE-16176-03-2004.pdf.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World security. However, the export control system enforced in the United States today has failed to evolve with changing global conditions, and now produces significant harm to U.S. military capability, to homeland security, and to the nation’s economic competitiveness. Harm to U.S. military capability. Over time, the harm to the U.S. military capability caused by export controls has expanded and has now reached substantial proportions. In response to export controls, decisions of U.S. corporations actually prevent full utilization of American technology for defense purposes. Some U.S.-based companies that have developed valuable new technology choose to stay out of military markets because they believe (often erroneously) that if they do not sell to the military, then export controls would not apply to them. Other companies opt not to enter fields in which controls may apply and direct their investment capital elsewhere.12 Such decisions deprive the military of the benefits of new scientific and technological developments that otherwise might be available for incorporation into new military systems. Companies with significant commercial markets that continue to sell to the military may suboptimize military systems to minimize the impact of the export controls. As foreign companies and governments fill the competitive gaps left by U.S.-based companies that are not permitted—or choose not—to export, valuable technical developments occur outside the United States to which the U.S. military and intelligence agencies then have no access. The additional financial costs to companies for compliance with export licensing are particularly difficult for smaller, innovative suppliers to absorb, and Even more than 25 years after the international sales of the F-16 jet fighter aircraft, only non-major F-16 spare parts can be transferred between countries that purchased this fighter. An official third-party transfer license is needed—even in-theater—when one country provides emergency repairs for another. As a result, force readiness may be compromised. SOURCE: Defense MOU Attachés Group (Defense Cooperation Attachés of 21 member nations). 12 In a 2002 unpublished report by the Office of the Deputy Under Secretary of Defense (Industrial Policy), titled “Less Traditional Suppliers for transformational warfare” (summarized in the 2003 report, Transforming the Defense Industrial Base: A Roadmap), it was found that export control restrictions are a major impediment to participation of less traditional suppliers.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World they are thus deterred from working with the military to solve critical defense problems.13 Export controls also constrain the contribution that allied military forces can make to U.S. military operations. For example, in an overseas military operation, some allies may be cleared to repair U.S. equipment and others may not; this can prevent repair at facilities closest to the theater of operation. Allied military equipment returned to the United States for repair may need to be cleared for “export” (before shipment back) by determining that nothing has changed to affect the equipment’s compliance with U.S. export law. The military thus faces difficulties in outsourcing maintenance and other services to take advantage of lower-cost foreign commercial sources for functions traditionally performed by military personnel. Foreign manufacturers increasingly refuse to install U.S. equipment in systems they produce. If non-U.S. equipment is used, U.S. export controls do not apply. If U.S. equipment is used, then export controls do apply, and the systems may not be shipped or re-exported without approvals that involve a lengthy bureaucratic process. Foreign defense contractors also avoid using U.S. subsystems to avoid U.S. controls that would restrict third-country transfer and other commercial uses.14 Finally, these controls may actually hamper the U.S. government’s own understanding of foreign military capabilities and foreign scientific developments. When components or products are available from many sources around the world, U.S. export controls cannot prevent foreign militaries from acquiring them. Allowing foreign military services to buy such components from U.S. sources can improve U.S. awareness of the characteristics of their systems, which might otherwise be just as capable but less well understood. 13 It is the view of small entrepreneurial companies, such as the Insitu Group which helped to pioneer the unmanned aerial vehicle (UAV), that classification of their technology as dual-use can “significantly impede small company growth.” This example and others are described in Transforming the Defense Industrial Base (see footnote 16) available at http://www.acq.osd.mil/ip/. 14 In 1999, commercial satellites were reclassified by Congress from being controlled by the Commerce Department as a dual-use item to being controlled by the State Department as munitions under the International Traffic in Arms Regulations. Alcatel Space (now Thales) then announced in 2002 its company policy to build ITAR-free satellites, launching its first ITAR-free satellite successfully in 2005. Since then, other European aerospace companies such as EADS, Morotta, and Surrey Satellite Company have all followed suit and advertise their products as being “ITAR-free.” The European Space Agency has recently implemented a policy of “nondependence” on U.S. spacecraft parts as a “key performance indicator” in purchasing decisions. Sources: William Mathews, U.S. Holds Up Sale of C-295s to Venezuela, Defense News, October 24, 2005, and Peter B. de Selding, Europe to Reduce Need for Foreign Spacecraft Parts, Defense News, October 6, 2008.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World Given the globalization of science and technology, it is particularly important to monitor technological developments overseas, not only to ensure that U.S. military systems use the world’s best technologies, but also to understand what capabilities might become available to U.S. adversaries. Constraints on interactions between U.S. and foreign researchers will handicap this country’s ability to track global technical developments that might have relevance to national security. As the CSIS Commission on Scientific Communication and National Security put it, “In a world of globalized science and technology, security comes from windows, not walls.”15 The Russian RD-180 engine powers all Atlas V vehicles for critical U.S. national security and civil space launch missions. Export controls inhibit U.S. engineers from collaborating in troubleshooting or improving the engine in any way. An RD-180 engine (or derivative engine, such as the RD-171M) failure or serious anomaly on a U.S. or foreign launch could ground the Atlas V fleet. Resolution of the root cause and corrective action needed to return the Atlas V fleet to flight status is severely impeded by the export control regime that highly constrains U.S. interactions with the Russian designers and producers of the engine. SOURCE: Greg Pech, Director, Atlas Propulsion Systems, United Launch Alliance LLC. Harm to homeland security. Many export controls have the potential to damage homeland security because they are based on the premise that selected technology should be limited to use inside the United States and by American citizens—in other words, an extension of the “Fortress America” mindset. Yet U.S. homeland security may be well served by the use of sophisticated military-like systems in international locations such as airports and seaports. The movement between U.S. and international commercial locations—and movements between one international location and another—required for aircraft that might be equipped with anti-terrorist devices is also not addressed in the current export control regime. As a result, some anti-terrorist systems may be most essential in precisely the countries where the risk of diversion brings export controls into play and encumbers their use. 15 CSIS Commission on Scientific Communication and National Security, Security Controls on the Access of Foreign Scientists and Engineers to the United States, October 2005, p. 15. Available at http://www.csis.org/media/csis/pubs/051005_whitepaper.pdf.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World Export controls may also act to make U.S. advanced technology companies less able to compete for global business, particularly homeland security business, and therefore less able to sustain their technological preeminence that produces the technology needed to protect the United States and its citizens. In addition, some important new areas critical to homeland security cannot be made to fit into the current regulatory framework, such as the free exchange of civilian information on the Internet, or the rapid advances in the biological sciences. The implications of these two domains for greater homeland or global security are not yet fully understood. They have largely been the province of the commercial world, academia, and the non-security sectors of the U.S. government. Advances in these fields rely for their creative success on broadly distributed, informal networks of individuals committed to an unprecedented level of openness well beyond the control or economic leverage of the homeland security community. Both are examples of newly important areas in which current export controls may not work well. Counter-MANPADS systems (Man Portable Air Defense System) are designed to protect aircraft from a shoulder-launched missile. They are categorized as munitions by the International Traffic in Arms Regulations (ITAR). Installing Counter-MANPADS systems on commercial aircraft would require an ITAR license for each travel leg outside the United States. Inherently unpredictable airline schedules make it impractical for airlines to provide such protection. SOURCE: Richard Barth, De-conflicting Counter-proliferation and Counterterrorism Policy, presented at COSSP Meeting, Irvine CA, December 13, 2007. Harm to U.S. economic competitiveness. The artificial limitations on trade imposed by lists of controlled technologies have had predictable results with respect to the U.S. position in global markets. With U.S. companies prevented by export controls from competing in certain markets, foreign competitors, often sponsored by their governments, spring to fill these competitive gaps. As these competitors have proliferated, U.S. companies have suffered challenges in the marketplace that would not have been present but for export controls. The biggest risk to U.S. jobs is a lack of economic competitiveness, and U.S. export control policy directly undermines
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World that competitiveness.16 Even if a U.S. company is licensed to export a controlled product, a foreign buyer may be reluctant to use it because of the fear that a separate export license will be required to make repairs, or even to honor a request for additional information about the product. A 2007 survey of 202 aerospace companies indicates that compliance costs associated with export controls average $50 million annually and have increased 23% since 2003. SOURCE: Air Force Research Laboratory analysis of survey of 202 space companies/business units, 2007. Reported in the CSIS report, Health of the U.S. Space Industrial Base and the Impact of Export Controls by Pierre Chao, February 19, 2008. Available at http://www.csis.org/media/csis/pubs/021908_csis_spaceindustryitar_final.pdf. As U.S. companies have evolved to compete in global markets and have become multinational corporations with a substantial presence in numerous countries, the cost of complying with U.S. list-based export controls has risen dramatically. This additional burden on U.S.-based companies makes them less competitive. The regulatory limits on providing controlled information to foreign scientists and students now affect the research and development capacity of U.S. corporate laboratories. This is especially true as U.S.-based firms establish laboratories overseas, and even as they staff their U.S. laboratories with graduates of U.S. science and engineering programs, an ever-increasing share of whom are foreign nationals. Failure to “run faster” by developing qualitatively better products and services with the best talent available is a serious threat to U.S. economic competitiveness. Similarly, export controls and “deemed export” rules make U.S. universities less able to attract the most capable foreign researchers or to retain some of the most creative faculty members.17 Important discov- 16 A key to designing the Boeing 787 aircraft is the ability of engineers at Boeing to work closely with foreign suppliers. Yet many of Boeing’s engineers are veterans of the B-2 stealth bomber program of two decades ago, who refused to guarantee that their know-how in designing aircrafts did not come from their participation in that program. This caused delays in the 787 program, as lawyers had to pour through documents from the 1970s to determine if key technologies for the 787 came from the commercial sector and were thus free of ITAR controls. In some cases, engineers had to develop new tests to prove well-known facts in technologies like composites to ensure that this knowledge did not come from the B-2. Dominic Gates, Separation anxiety: The wall between military and commercial technology, Seattle Times, January 22, 2006. 17 See, for example, Science and Security in a Post 9/11 World, pp. 40-48 (National Academies Press), and The DEAC Report, pp. 35-46 (Deemed Export Advisory Committee, Department of Commerce).
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World Freedom to collaborate without limitation. Open communication among scientists can provide insights into problems and their solutions that otherwise might escape notice. Rapid advances often occur at the interfaces between fields or from the application of advances in one field to a related field. Free and open interaction among scientists serves to open windows of intellectual inquiry that otherwise might remain closed. Pluralistic and meritocratic support of science. Science in the United States is not guided by a master plan that constrains scientific activity to defined avenues. A variety of federal agencies and philanthropies provide support for research, thus providing some assurance that important areas of work will be funded, even if they depart from the mainstream view. Multiple funding sources and decisions also help ensure that research with implications for a particular organization’s mission will be conducted. Similarly, most scientific research funding is administered under a meritocratic review system designed to support the best researchers who propose the best ideas. Freedom to publish. Science is a cumulative subject in which each scientist builds on the work of others. The fundamental error-correction mechanism of science arises from the replication of work that has been conducted by others, thus enabling mistakes to be exposed. This approach depends on the wide dissemination and open communication of scientific results and methods. These practices are threatened by government regulation that restricts the flow of information about scientific and technological endeavors and the flow of people participating in research. Indeed, the need to prevent government restrictions from damaging the fundamental research enterprise was recognized as far back as the Truman Administration, and it was codified by President Reagan in 1985 in National Security Decision Directive 189 (NSDD-189). This Directive states that the United States’ “leadership position in science and technology is an essential element in our economic and physical security,” and that “the strength of American science requires a research environment … in which the free exchange of ideas is a vital component.”44 It then goes 44 CSIS Commission on Scientific Communication and National Security, “Security Controls on Scientific Information and the Conduct of Scientific Research,” June 2005, p. 1; available at http://www.csis.org/media/csis/pubs/0506_cscans.pdf. Quotations are from National Security Decision
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World on to direct that “where the national security requires control, the mechanism … is classification,” and that to the extent consistent with law, “no restrictions may be placed upon the conduct or reporting of [unclassified] federally-funded fundamental research.” Presidential Directives remain in force until supplanted or rescinded, and for this one, neither has happened. In fact, it was explicitly reaffirmed by then-National Security Advisor Condoleezza Rice in 2001. According to the CSIS Commission on Scientific Communication and National Security, This Directive does not assert that the open dissemination of unclassified research is without risk. Rather, it says that openness in research is so important to our own security–and to other key national objectives–that it warrants the risk that our adversaries may benefit from scientific openness as well. And even though today’s adversaries differ from the ones we faced during the Cold War, the world’s scientific and technological landscape has also evolved. Science and technology are global enterprises, and our ability to constrain their adverse application by unilaterally restricting their dissemination is if anything even poorer today than it was when NSDD-189 was issued.45 Despite this directive’s language barring restrictions on either the conduct or the reporting of fundamental research, it has not had the effect of precluding all such restrictions. A number of recent reports have addressed the effect that “sensitive but unclassified” information controls, contractual clauses, and “deemed export” controls have had on fundamental university research in the United States, particularly that involving foreign nationals.46 The Need for Scientific Talent from Outside the United States Three parallel developments have increased U.S. dependence on foreign scientific talent. U.S. corporations are shrinking their U.S.-based laboratory infrastructure and are expanding their overseas research capabilities. At the same time, U.S. university-based science Directive 189, “National Policy on the Transfer of Scientific, Technical, and Engineering Information,” September 21, 1985, a directive that applies to “federally-funded fundamental research in science, technology and engineering at colleges, universities and laboratories.” 45 Ibid., p. 2. 46 Ibid., as above. Also, see Restrictions on Research Awards: Troublesome Clauses 2007/2008. Released July 2008. See also the original version, Association of American Universities/Council on Governmental Relations. 2004. Restrictions on Research Awards: Troublesome Clauses, A Report of the AAU/COGR Task Force.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World research centers have also become more dependent on foreign talent. And, in the U.S. workplace, foreign scientists and technology specialists are in great demand. Over the past 20 years, many corporate research laboratory operations within the United States that focused on fundamental research have been reduced in scope or eliminated entirely. The trend more recently has been to locate corporate research and development operations overseas to take advantage of skilled local researchers, lower wages for research work, and eventually, rising product demand in fast-growing economies. In some cases the ability of a corporation to market its products most effectively in a particular country requires placement of a research laboratory or a manufacturing plant in that country. U.S. and multinational companies now have corporate research laboratories located in China, India, Israel, and Europe. Alcatel and Bell Labs formed a joint venture in China, Alcatel Shanghai Bell. Chinese researchers exploring 4G wireless systems may collaborate with their colleagues in Alcatel’s laboratory in Germany. However, export controls preclude the participation of 4G researchers in Alcatel’s New Jersey lab. SOURCE: Dr. Jeong H. Kim, President, Bell Labs at Alcatel-Lucent, The Impact of Export Controls on the US Economy (via teleconference). COSSP Meeting, March 14, 2008. An American company that locates facilities in other countries is faced with rules that change based on location. For example, work that is conducted by Chinese citizens in a Chinese facility with no technology or knowledge transfers from a parent U.S. firm would not be subject to U.S. controls, regardless of how sophisticated the design or objective. However, two research teams within the same corporation, one in the United States and one in a foreign country, may not be able to collaborate, even on a project involving rather old technology, due to export control regulations. These situations are independent of whether the company has proprietary protections for its research results that would protect the technology from possible diversion outside the company. U.S. research universities have been expanding overseas, setting up affiliates or branches in Hong Kong, Singapore, China, Europe, and more recently, India and the Middle East. Similarly, universities in the United States are partnering with universities across the globe. Much of this expansion has been proceeding for more than a decade and involves challenging research collaborations. These overseas operations
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World are beginning to attract scientific research talent in these host countries that prefers to work at home. U.S.-based researchers benefit from collaboration with researchers in these foreign affiliates. But such linkages further complicate the distinctions that must be drawn under existing regulations between U.S. and foreign institutions. Locations of the Top 100 Research Universities Country Rankings THES-QS SJTU Australia 7 3 Canada 5 4 China 2 Europea 36 33 Hong Kong 3 Israel 1 1 Japan 4 4 Korea, South 2 New Zealand 1 Russia 1 Singapore 2 United States 37 54 SOURCES: Times Higher Education Supplement-Quacquarelli Symonds (THES-QS) “World University Rankings 2008” and the Center for World-Class Universities, Shanghai Jiao Tong University (SJTU) “2008 Academic Ranking of World Universities.” aEurope includes: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Sweden, Switzerland, and the United The influence of foreign universities and foreign government laboratories is increasing. Universities around the world now have the capability to compete effectively for scientific leadership against the U.S. science and engineering establishment in many fields. The best foreign universities now have the research equipment and infrastructure to compete with the best U.S. research universities for students and researchers. Where limitations exist on foreigners studying or working in the U.S. system, foreign universities are well positioned to extend competing offers. The United States also depends in significant ways on a global scientific and technological workforce at home. The percentage of science and engineering workers in the United States who are foreign nationals increased from 14 percent to 22 percent from 1990 to 2000. In 2006, more than half the doctorate-level graduating engineers in the United States were foreign-born, as were 45 percent of the PhD recipients in the physical sciences, computer sciences, and life sciences.47 Access to foreign scientific talent is controlled by U.S. visa policy, which is based on a statute enacted in 1952 (with major amendments in 1965, 1986, and 1990), and on laws related to non-immigrant visas 47 The DEAC Report, pp. 65-66.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World TABLE International STEM Scholars by Specialization in the United States Major Field of Specialization 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Growth 2001/07 Health Sciences 23,568 21,070 17,244 19,630 19,590 23,872 1.3% Biological and Biomedical Sciences 12,558 14,749 19,234 19,271 22,500 19,353 54.1% Engineering 9,806 9,945 8,871 10,398 11,056 11,789 20.2% Physical Sciences 12,042 12,052 10,943 11,832 11,735 11,494 −4.6% Agriculture 2,925 3,287 2,570 3,316 3,006 3,930 34.4% Social Sciences and History 3,871 3,456 2,736 3,585 3,491 3,635 −6.1% Computer and Information Sciences 2,838 2,697 3,067 2,779 3,200 2,947 3.8% Mathematics 2,236 2,276 1,990 2,151 2,231 2,161 −3.4% Psychology 860 843 995 1,076 1,164 1,474 71.3% TOTAL 70,704 70,375 67,650 74,038 77,973 80,654 14.1% SOURCE: Institute of International Education, Open Doors report, 2007.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World that were passed after September 11, 2001.48 The Immigration and Nationality Act of 1952, as amended over the years, governs who may enter the United States. This law is administered by the Department of State, and as of 2003, by the Department of Homeland Security. The general visa requirements for entry to the U.S. pre-date the current security climate, which is focused on the potential terrorist threats emanating from non-state and substate actors. Formerly, visa restrictions focused on nation-states and defined the risk of admitting a particular person to the United States with reference to that person’s country of origin or current residence.49 Like the export control system, the visa system as it affects visitors who come to the United States for scientific or technological work or study is based on lists. The Technology Alert List implements the Immigration and Nationality Act and was created during the Cold War to help consular officers identify areas of science and technology in which exports of technology or information might be controlled. The list itself, which sets out general categories of “sensitive” academic disciplines, is no longer made public. But in the recent past, it has included biotechnology, chemical and biomedical engineering, advanced computer and microelectronic technology, marine technology, robotics, and urban planning. Students and researchers seeking to enter the country to study in these areas are specially reviewed. The Visas Condor Program (established in 2002) also implements the Immigration and Nationality Act. In addition to specific classified criteria, it sets out 25 countries (including China, India, Israel, and Taiwan) from which anyone applying to enter the United States is specially reviewed.50 The Visas Mantis Program (established in 1998) focuses on the applicant’s proposed activities in the United States that may have security-related concerns. 48 After the terror attacks of September 2001, visa rules were almost immediately modified by the USA PATRIOT Act of 2001, and subsequently by the Enhanced Border Security and Visa Entry Reform Act of 2002, the Homeland Security Act of 2002, and the National Intelligence Reform Act of 2004. 49 Then as now, however, the primary determining factor for allowing foreign nationals into the United States for nonpermanent stays is whether the applicant could demonstrate that they planned to return home. 50 For both the Technology Alert List and Visas Condor program, see http://www.travel.state.gov/law/legal/testimony/testimony_797.html.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World Like the export control list system discussed above, over time, the visa list system added general categories of academic disciplines or countries of concern, but rarely took any subject or any country off a list. Like the export control regime, the visa restriction system suffers from all the infirmities of a static, list-based system administered by separate and often competing bureaucracies. Consular officials charged with evaluating visa applications often lack the necessary technical or scientific expertise to determine efficiently whether an applicant is a legitimate scientific researcher or poses a security risk. Up to six different agencies51 may be involved in the visa clearance for a single individual to visit the United States, whether the visit is for a week to attend a conference or for a multiyear stay as a student. After the September 11, 2001, attacks, the visa regime was tightened. The interagency review process had been based on a system that allowed entry if no agency raised a specific objection within 10 days. The new process requires an affirmative clearance before a visa is issued, regardless of how long the review process takes. The scientific community—and particularly, the scientific research community—raised a vigorous protest in 2003 over the post-9/11 visa rules because too many legitimate scholars were being caught in the regulatory net.52 The State Department responded and within two years, the most draconian rules affecting graduate students were ameliorated significantly. Students and exchange visitors applying for non-immigrant visas were given priority, and the duration for students in the United States with Visas Mantis clearances was extended from one year to a maximum of up to four years for students. However, significant barriers still remain for scholars and researchers seeking visas to attend conferences or for other short-term professional trips in the United States.53 51 For example, the U.S. Embassy located in the country where the researcher has applied for a visa, the CIA, FBI, the Departments of Commerce and Homeland Security, and the Department of Treasury’s Office of Foreign Assets Control. 52 The scientific community protested in a House Science Committee hearing on March 26, 2003, and received the Committee’s full support. Two weeks later, in a speech at the AAAS Science and Technology Policy Colloquium, John Marburger, the Director of the Office of Science and Technology Policy, also lent his support to addressing these visa issues. For a summary of the hearing, see “House Science Committee Calls for Review of Visa Policy Changes” by Charlene Porter, available at http://www.america.gov/st/washfile-english/2003/March/20030327161127retropc0.3604242.html, and for the text of the director’s speech at AAAS, see http://www.ostp.gov/pdf/jhmaaasvisas.pdf. Accessed October 15, 2008. 53 One problem stems from the time it takes to fulfill the requirement from the National Intelligence Reform Act of 2004 that 100 percent of all applicants be interviewed.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World The uncertainty surrounding the ability of even prominent members of the international scientific community to acquire visas has obvious negative effects. Dr. Goverdhan Mehta—former director of the Indian Institute of Science and the president of the University of Hyderabad, and current president of the International Council for Science, an organization comprising the national scientific academies of 29 countries including the United States—was invited to give a lecture at the University of Florida in 2006. His visa application was initially delayed pending review in Washington to determine “the potential use of his research in chemical weapons.” Although the visa was ultimately issued, Mehta withdrew his application and cancelled his trip to the United States. SOURCE: Available at http://www.sciencemag.org/cgi/content/full/311/5765/1229a?rss=1. Last accessed July 22, 2008. Foreign candidates for corporate jobs or university positions go elsewhere. When foreign nationals develop technologies for foreign companies, the United States loses the advantage of determining how those technologies will be developed and deployed. The often prohibiting difficulties of foreign researchers to participate in conferences held in the United States causes conference organizers to seek sites outside the United States. When entry restrictions exclude or discourage the best foreign researchers from working for U.S.-based companies, the U.S. military may have access to the world’s best work only after it is commercialized in a foreign country. With the need to “run faster” to remain competitive in the global economy, we need to be doing more, not less, to attract the most highly skilled personnel from all over the world to work in the United States. Current law has the perverse effect of permitting foreign students to enter the United States only if they can prove to a consular officer’s satisfaction that they will take what they learn home with them. For most categories of prospective student or scholar, anyone who admits that he or she might want to stay in the United States and contribute to this country’s technological competitiveness must—by law—be denied entry. Re-examining and re-calibrating visa restrictions would be an important step toward assuring that the United States is the destination of choice for foreign scientists and students, as well as the leading producer of cutting-edge scientific research. The benefits to national
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World security appear to be negligible from excluding credentialed, recognized foreign scientists, particularly if they are sponsored by a research institution or credentialed U.S. researchers. More important, the damage to U.S. economic prosperity is significant. The government cannot protect U.S. jobs by denying entry to foreign students and researchers. The jobs will simply go elsewhere. The biggest risk to U.S. jobs is a lack of economic competitiveness. Scientific talent working in the United States, from whatever country, promotes the goal of full employment. FINDING 4 A new system of export controls can be more agile and effective, recognizing that, under current global conditions, risks to national security can be mitigated but not eliminated. An important caveat attaches to any discussion of changes in the current system of export controls: there is no “risk-free” solution. Today’s system is not risk-free either; in fact, it is arguably becoming more and more dangerous because the inclination to equate control with safety gives a false sense of security. The national security threats facing the United States from potentially hostile nation-states and actively hostile non-state terrorist groups are numerous, diverse, and wide-ranging. We can minimize the risk from these threats, but no system can avoid them entirely. Somewhere, somehow, our nation’s protective systems will be breached in the coming years; in virtually all cases, the means to accomplish these breaches exist in open markets worldwide. There is no realistic prospect of controlling all means of doing physical harm that might be used against us. The United States should not abandon its high walls around the technologies that can deliver a substantial and sustainable security advantage. There should be strong restrictions on technologies critical to the proliferation of nuclear weapons and on physical access to certain biological pathogens; if used for destructive purposes, both can cause catastrophic consequences. Likewise, there should be strong restrictions on those scientific breakthroughs with uniquely military applications. Stealth is one such example. But where there is a “civilian” use that is commercially relevant for legitimate productivity or consumption purposes in global markets, we should regulate very cautiously. Where technology is internationally accessible, along with a good market potential for products incorpo-
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World rating that technology, unilateral export controls enforced only by the United States cannot provide any meaningful protection. U.S. industry is a major source of military equipment for our allies. When export restrictions are injudiciously applied, the result can be to undermine their confidence that the United States will be a reliable supplier of modern arms. And, as a result, it can stimulate the rise of arms production capability outside the United States. Based on their range and payload, unmanned aerial vehicles (UAVs) are classified as cruise missiles under the multilateral Missile Technology Control Regime whose objective is nonproliferation of weapons of mass destruction. U.S. implementation of the regime using severe restrictions has caused frustration among allied militaries and may be encouraging other countries to develop the very technology being restricted. Unmanned aerial vehicles (UAVs) are relatively inexpensive aircraft, built from current technology. They are well suited to in-theater surveillance where U.S. and allied forces work closely together. However, export regulations restrict export or exchange of information on UAVs by classifying UAVs as cruise missiles based on range and payload. This is yet another case of export regulations authored in a past era impeding military cooperation today. Under current global conditions, risks to national security can be mitigated, but not eliminated. A careful balance among interests is required, and the burden of proof must be on those who seek to restrict access, rather than the opposite. * * * The committee finds that a clear, over-arching statement of national policy can be a useful means of resolving some important bureaucratic conflicts with respect to export controls. National Security Decision Directive 189, in effect since 1985, is an example of this approach and provides an essential building block for a new export control policy. A 1982 study sponsored by the National Academies concluded that government controls on the publication of results from federally funded research were intruding into the conduct of research to a degree that could adversely affect important advances in science in the United States.54 By Executive 54 The Corson Report.
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Beyond "Fortress America": National Security Controls on Science and Technology in a Globalized World Order, then-President Ronald Reagan required that government agencies determine in advance whether the products of federally funded fundamental research would be classified. If classification was not justified, then these research products would remain unrestricted and could be published by the researcher or sponsoring institution. This policy statement provides protection for the publication of much of the research done in academic institutions. This balancing of national security concerns and the benefits of open publication of scientific work has served the nation well. The committee finds that a final, competent, neutral decision-making body, external to the competing agencies, can also be a useful means of resolving these vexing conflicts inherent in the current system of export controls. This kind of decision-making body can be adapted for the export control system so that both sides, the would-be exporters and the export controllers (or other interested government agencies), can marshal their evidence and a reasoned decision can be made. If favorable to the exporter, a prompt decision would mean that business exporters are not deprived of a market while foreign competitors move in and researcher “exporters” are not deprived of the opportunities to benefit from international collaborations. The existing system of export controls is not our only alternative. Nor do we have to abandon export controls altogether in the face of global competitive forces. Numerous studies have made more targeted proposals. This report sets out the high-level changes that need to take place by direction of the President before smaller changes recommended elsewhere can be implemented successfully. The committee finds, however, that a better system is imperative and can be accomplished through a single Executive Order setting the system on a path much more protective of both national security and economic prosperity.