on economic competition in the global marketplace, and (4) be responsive to new threats from countries that raise concerns about proliferation.

The assumptions built into and the limitations imposed on the study are to some extent similar to those of the previous COSEPUP study, the Allen report. But they also differ in several important respects. The similarities and differences include the following:

  • Means of strategic technology transfer. Like the Allen report, this analysis focuses on problems associated with the direct or third-party diversion—or in some cases, legal sale—of technology considered important to the military systems of potential adversaries. It does not address, except in a general way, the problem of military or industrial espionage, against which export controls are largely ineffective.

  • Deficiencies in the U.S. defense industrial base and military procurement process. Because maintaining Western military capabilities requires developing and fielding new technology, as well as denying technology to potential adversaries, issues relating to the U.S. industrial base and procurement process are highly relevant. However, as did the Allen panel, the panel determined that the complex problems associated with maintaining the U.S. defense industrial base and/or rationalizing the military procurement process were beyond the terms of the congressional request.

  • Use of export controls to protect short supplies and U.S. Markets. The panel chose to set aside the application of export controls to prevent the short supply of certain strategic commodities. It also did not address more recent proposals to impose (or reimpose) export controls to promote U.S. economic competitiveness, for example, in situations in which another nation is selling products or services (e.g., space launches) on the international market at heavily subsidized prices. The panel determined that the treatment of such policy issues also exceeded its charge.

  • Economic and technological impact of export controls. The Allen report was concerned exclusively with the impact of export controls on the United States and other non-Communist countries. Although that remains a primary focus of the current study, the dynamic political situation in Eastern Europe and recent progress on arms control negotiations make the situation today vastly more complicated. Among cooperating Western countries, the need for virtually license-free trade with each other is now taken almost as a given. But the constraining impact of controls on countries newly converted to democracy and to market economics was—and properly so—a subject of concern to this panel as well.

  • Broadened focus of controls. The Allen panel focused exclusively on the control of dual use goods and technology, primarily as implemented under Section 5 of the Export Administration Act of 1979, as amended, and it chose explicitly not to address issues associated with munitions controls

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