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Finding Common Ground: U.S. Export Controls in a Changed Global Environment 11 Key Findings and Conclusions of the Panel THE NEED FOR EXPORT CONTROLS IN A CHANGED GLOBAL ENVIRONMENT Growing Economic and Technological Challenges for the United States The panel notes the following challenges to the United States: The changing structure of the global economy The increasingly rapid global diffusion of technology Declining U.S. technological and manufacturing preeminence Growing technological and manufacturing sophistication in Japan and the newly industrializing countries The changing distribution of global economic and financial power The weakening of the U.S. defense industrial base The growing importance of exports to U.S. economic vitality A Redefinition of U.S. Export Control Policy Export controls, sharply reduced in number and fully multilateral, are a necessary and appropriate policy instrument for responding to any remaining national security threat posed to the United States by the Soviet Union and the other former Warsaw Treaty Organization (WTO) countries, but a new
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment West-East policy approach must be developed if export controls are to remain an effective policy instrument under the changed national security conditions. Given the new political realities, export controls will be viable only if they enable the United States and other nations that share common objectives to (a) remain vigilant and prepared during the period of economic and political transformation now under way within the Soviet Union and Eastern Europe; (b) facilitate (rather than obstruct) the pursuit of important political and economic objectives, such as further democratization and the development of market economies in the Soviet Union and Eastern Europe; and (c) address flexibly new types and sources of national security challenges, such as those derived from growing proliferation threats or the threat of terrorism, as they emerge. Because of the enormous uncertainties inherent in the current situation, a new and clearly more sophisticated approach to export control policy is required, one that could be adapted and modified to a range of future conditions. Among its principal features would be the following interactive goals: Maintaining a qualitative edge in U.S. military systems as a deterrent against threats of aggression, including those posed by Soviet and Soviet-allied forces. Preventing or retarding the proliferation of items that could directly and immediately enhance the conventional or strategic capabilities of countries that may now or in the future pose a threat to the physical security or vital interests of the United States and other nations that share common objectives. Preventing or retarding the proliferation of items for use in acts of terrorism or other political violence against the interests of the United States and other nations that share common objectives. Preventing or retarding the proliferation of items that may be destabilizing to global or regional political structures and power alignments. Avoiding negative impacts on economic competitiveness and the overall viability of the free market economies that participate in global trade. Promoting further political democratization and economic development in the Soviet Union, Eastern Europe, and elsewhere. Encouraging conversion (or closure) of military industrial facilities in the Soviet Union and Eastern Europe to the manufacture of products for civilian consumption. Maintaining harmony with U.S. allies and cooperating countries in the administration of export control measures. Improving the structure and administration of export controls to increase efficiency and lessen adverse effects on the private sector. THE IMPACT OF EXPORT CONTROLS ON U.S. INDUSTRY The precise measurement of the quantitative effect of export controls on the U.S. economy is an elusive goal. Unlike other factors that contribute to
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment U.S. competitive difficulties, however, export controls are largely modifiable by changes in U.S. policy, and hence, their negative impact can be ameliorated, if not entirely eliminated. U.S. industry's concern about the negative economic impact of export controls on U.S. industry has stemmed almost entirely from the unilateral aspects of U.S. policy, including restrictions and control practices not imposed by U.S. allies and partners in the Coordinating Committee for Multilateral Export Controls (CoCom). Significant unilateral features of the U.S. control system include the following: controls on reexports of U.S. items to third countries and the requirement for written assurances regarding end use and reexport; controls on U.S.-owned foreign entities; controls on foreign products that use (or are made with) technologies of U.S. origin; controls on foreign products that have U.S.-origin components in them; control of some dual use items as munitions that other CoCom nations regulate less restrictively as dual use products; selective imposition of unilateral product and technology controls; more burdensome and complex licensing regimes; and more stringent enforcement mechanisms. Unilateralism disadvantages the U.S. economy and can rarely be justified in a competitive world economy by security concerns. Unilateral features should be eliminated from U.S. national security export controls except in those rare instances in which such a unilateral action would be effective or holds the prospect of changing the position of other countries within a relatively short time. EVIDENCE ON THE ACQUISITION OF SENSITIVE WESTERN TECHNOLOGY Espionage The panel finds that export controls cannot—and are not designed to—prevent espionage. Rather, they are designed to restrict the sale, either direct or indirect, of strategic technology and equipment. Diversion and Legal Purchases Evidence reviewed by the panel (both classified and unclassified), which was corroborated by information collected during the panel's fact-finding missions in Asia and Europe, indicates that the diversion practices of the Soviet Union and its Warsaw Pact allies continued through 1990.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment Similarly, the panel was unable to identify any overall change during the late 1980s in the efforts by the Soviet Union and its WTO allies to acquire through legal purchases technology in the West for incorporation into military systems. The Role of the Intelligence Community in the Export Control Policy Process The panel recognizes that one of the most valuable contributions of the intelligence community has been to develop ''red side" methodological approaches that have made it possible to examine Soviet technology acquisition efforts from the standpoint of Soviet, rather than Western, military needs and capabilities. "Red side" thinking, however, is not yet sufficiently institutionalized in the intelligence community's support for U.S. export control policy. As a result, policy analyses for export controls have tended to continue to use "mirror image" assumptions regarding Soviet requirements for Western technology, based on Western, instead of Soviet, military systems and capabilities. The panel takes note of the continuing paucity of reliable data on changes in the nature and pattern of Soviet technology acquisition efforts since 1989. It also finds an even more serious lack of reliable data on the scope and extent of technology acquisition in the West by countries that are the focus of proliferation concern. THE CHANGING CALCULUS OF U.S. NATIONAL SECURITY INTERESTS The Growing Importance of Exports to U.S. Economic Vitality The panel notes that, taken together, problems with the U.S. defense industrial base, the shift from defense-to commercially driven innovation, the emergence of Asian and European industrial competitors, and the increased importance of exports to the U.S. economy have led to a growing realization that economic factors must be given increased weight in the formulation of U.S. national security policy. Changes in the Soviet Union and Eastern Europe The panel deems it reasonable to assume that the Warsaw Pact has lost its fundamental meaning and for all practical purposes no longer makes possible a forward-based, Soviet strategic offensive capability in Central Europe. Indeed, trends in Europe will soon foreclose the very possibility of stationing Soviet forces outside the borders of the Soviet Union.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment The panel recognizes that German reunification may give the Soviet Union access to some technologies that it would otherwise have been denied, as refurbished former East German firms honor outstanding contracts, but the panel also believes that the larger processes at work are sure to erode the Soviet ability to acquire technology throughout eastern Europe. The Soviet Union is becoming a far more transparent and penetrable society, which has important implications for the West's estimation of its security concerns. It now appears possible to establish and maintain a distinction between commercial and military applications in considering technology trade with the Soviet Union. Cooperation in regulating general weapons exports also appears feasible in this new context, as do mutually supportive policies on regional conflict. This relief from traditional concerns and the expansion of constructive opportunities enable a shift in Western export control policy from one emphasizing general denial to one focusing on positive behavioral change, along with verifiable end use. In other words, the panel believes that the West can move from an export control regime characterized by negative sanction to one characterized by positive inducement. On the basis of the announced reductions in Soviet and East European military forces (assuming that they are completed in good faith), the apparent dissolution of the Warsaw Pact as a military alliance, and the emerging, defensive Soviet military posture in Asia, the panel accepts the conclusion drawn by the Department of Defense that there is no credible scenario in which the Soviet Union could mount a theater-wide conventional attack against the West in either the European or Asian theaters with less than 18 to 24 months preparation. There is a continuing concern, however, about Soviet capabilities to launch local attacks within regions near the Soviet border with as little as 90 days mobilization. Growing Economic Exchanges with the East The panel believes that the likely result of large-scale Western economic assistance is that Eastern Europe and, to a lesser extent, the Soviet Union will become more dependent on the West, while the West will have a greater stake in the success of the economic and political reforms now under way. At the same time, debate will continue over where to draw the line in imposing East-West export controls. It is now in the West's security interest to permit the flow to Eastern Europe and the Soviet Union of dual use technology, apart from a few highly critical items. Indeed, the liberalization of controls could be part of a broad strategy to encourage further the process of political and economic reform in Eastern Europe and the Soviet Union, thereby strengthening that region's stability and security.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment The People's Republic of China as a National Security Threat The panel concludes that a cautious policy toward China is warranted by the impending generational change in Chinese political leadership, with its associated potential for further political upheaval. At the same time, it is in the interest of the United States to nurture a deeper and more cooperative relationship with the current Chinese leadership, which would include further efforts to convince China to participate more fully in the major nonproliferation regimes. Ultimately, establishing a certain degree of symmetry between the export control regime for China and the new rules that are under development for the democratizing East European countries and the Soviet Union may be desirable. As in the case of the former Warsaw Pact countries, however, the rate of further change in U.S. and CoCom export controls for China is likely to be governed by the stated foreign and domestic policies and actual practice of the Chinese government. The Changed Traditional Threats to U.S. National Security It is the judgment of the panel that the threat presented by Soviet military capabilities has fundamentally changed. Together with the United States, the Soviet Union is now attempting to move beyond the traditional paradigm of alliance confrontation to establish a new security relationship. In Western Europe in particular, the calculation of the need for export controls has changed as a result of the dramatic political events that have taken place since late 1989. The result is that support in Europe for the continuation of dual use export controls beyond the short term is disappearing rapidly. The continuation of viable controls even for the next few years will require a major reduction in the scope of the control list and a shift in the policy governing dual use export controls to allow controlled items to be exported to the Soviet Union if they are verifiably for civilian (i.e., commercial) end use. The Proliferation Threat Tensions in areas outside Central and Eastern Europe, the region traditionally of greatest Western concern, are being exacerbated by the spread of weapons of mass destruction and high-performance weapons. This trend adds to the need for a close reexamination and restructuring of existing nonproliferation regimes. The panel believes that, in all likelihood, the policy responses to the growing proliferation threat will require the creation of new multilateral
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment regimes, or strengthening of existing regimes, involving both the Soviet Union and China. There will be little chance for long-term success if these two key players are not officially included in all proliferation control regimes at the earliest opportunity. Without comprehensive multilateral regimes, the chances for effective control of proliferation threats are critically weakened. THE U.S. AND MULTILATERAL EXPORT CONTROL REGIMES Third Country Cooperation The panel takes note of the fact that no other CoCom partner requires the type of authorization for reexport out of a CoCom or cooperating country required by the United States. The end result is a serious disadvantage for U.S. economic interests. Nine distinct licensing benefits are available to cooperating third countries. Given the current licensing guidelines and processing times for most third countries, however, the only benefits of any significant value are the enhanced distribution license, permissive reexport exceptions, the broad general license for CoCom (G-CoCom), and the new general license for intra-CoCom trade (GCT). Basic Problems of the U.S. Export Control Regimes MULTIPLICITY OF STATUTES, AGENCIES, AND REGIMES Export controls are issued under a multiplicity of statutes with differing objectives and criteria. The statutes themselves were not coordinated at the time they were written and come under the supervision of different congressional committees. Over a dozen agencies, plus the military services, are engaged in administering controls and apply distinct regulatory provisions that often overlap and conflict. Acting at the request of the panel, the Congressional Research Service was unable to find any area analogous to export controls that had a comparable number of differing bureaucracies and regulatory categories. The lead agencies in constructing export control policy hold strongly diverse positions corresponding to their separate interests. As a result, these disparate agencies are often unable to integrate the various national security, economic, and foreign policy issues and give executive authorities a balanced, coherent view of the key issues.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment JURISDICTIONAL DISPUTES The panel believes that, in many instances, it is unclear which administrative agency has jurisdiction over a particular category of items. Neither the trade laws nor the implementing regulations of the various agencies provide clear standards for determining the correct authority covering the export. A disproportionate amount of bureaucratic resources are thus expended in resolving disputes, rather than administering and enforcing the export control system. The confusion over which law and which set of agency regulations pertain to particular items has caused delay and expense for U.S. exporters. OVERLAPPING ENFORCEMENT Domestically, overlapping jurisdiction and lack of communication between the U.S. Customs Service and the Commerce Department's Office of Export Enforcement have sometimes resulted in their working on the same case without each other's knowledge. The levels of sanctions for violations and the circumstances that must be established for their imposition vary from statute to statute. The sanctions that have developed over the years are the result of ad hoc legislation, and no effort has been made to assess and systemize these penalties. Moreover, unilateral U.S. adoption of extraterritorial sanctions may seriously undermine U.S. efforts to achieve effective export control cooperation. OUTDATED AND CONFUSING U.S. CONTROL LISTS The system of U.S. list management suffers from a lack of clear definitions and criteria for control and decontrol, as well as the widely varying formats and structures that exist for domestic and international lists. The fact that an item is taken off the Militarily Critical Technologies List, for example, does not necessarily lead to U.S. action to delete it from the CoCom or U.S. control lists. The foreign availability assessment process that was established to determine the controllability of items on the Commodity Control List has proven largely ineffective. Although data from foreign availability assessments are sometimes used in list review, the assessment process is costly and contentious and has rarely resulted in timely decontrol. The President was able to present a coherent decontrol plan to CoCom in June 1990 only by short-circuiting the existing process. Continuing White House pressure on the participating agencies was necessary to bring about significant loosening of restrictions. Under ordinary circumstances, in this key national security area, foreign nations and suppliers—not the U.S. interagency process—are driving the U.S. export control apparatus. Although
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment the June 1990 process has produced relatively substantial results, it is doubtful that the institutionalized CoCom and U.S. list review processes could work effectively in less exigent circumstances. INEFFECTIVE DISPUTE RESOLUTION The process for dispute resolution is characterized by a lack of transparency resulting from unclear policy guidelines and complicated agency responsibilities. The insufficient procedures for dispute resolution in licensing decisions cause further tension between agencies and disadvantage U.S. exporters. Clearer guidelines for case referral and more definitive standards for licensing decisions are needed. NATURE AND EXTENT OF UNILATERAL CONTROLS The panel believes that in a world of diffuse economic and technological power, the widespread use of unilateral export controls is counterproductive. Although some CoCom countries practice limited or unofficial forms of reexport controls, the United States is the only country formally requiring that its permission be obtained by non-U.S. parties for the reexport of goods or technology that have come to rest in another country. The major adverse reaction to U.S. reexport controls arises when they are imposed in connection with U.S. unilateral foreign policy objectives and when their application is complex, such as the rules for parts, components, and technical data. In addition, there is an abundance of anecdotal evidence that, when possible, foreign manufacturers avoid U.S. sources in order to escape the encumbrance of U.S. reexport controls. INSUFFICIENT JUDICIAL REVIEW The panel has concluded that, while judicial review is no cure-all, it can be a useful and effective instrument of policy. Specifically, judicial review is not the appropriate means for resolving interagency disputes on the very issues on which courts lack expertise and traditionally defer to the executive branch. What courts can do, however, is correct agency abuses in interpreting and applying statutory provisions, for example, a failure to dismantle unilateral controls when such action is mandated by Congress or the imposition of new foreign policy controls when statutory criteria have not been satisfied. INDUSTRY PARTICIPATION The panel believes that if U.S. industry fully understands and supports the rationale for controlling exports, the controls will be far more effective.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment Serious problems remain, however, with the extent of involvement by U.S. industry, which is a major reason why legitimate economic considerations are not taken into account at the start of the policy process. The traditional policy process does not lend itself to effective and fair presentation of industry views. The lack of sufficient business involvement in the system is partly self-inflicted, however. Too few companies make the effort or devote the resources necessary to placing qualified personnel on export-related advisory committees. The panel concludes that U.S. business must take a more active part in the process, particularly in the nomination of technically qualified personnel to work on the committees. In the process of energizing and upgrading export control regimes, it is not enough to solicit the participation of other governments. The private sector must be brought in as a full and cooperative partner. THE NEED FOR EXPORT CONTROLS IN THE NEW ERA The panel believes that the current challenge presented by the changes in Eastern Europe and the Soviet Union is to fashion a response that capitalizes on the enormous political and economic opportunities while managing the risk associated with legitimate security concerns. Carefully tailored and/or refashioned, multilateral export controls can be appropriate and viable in support of the following policy objectives: Constraining access by the Soviet military to technology and end products that contribute significantly and directly to the improvement of Soviet weapons systems capabilities. Constraining access to advanced technology and end products that contribute significantly and directly to the development of advanced conventional weapons systems by countries that pose a threat of aggression. Constraining access by countries of proliferation concern to nuclear, biological, chemical, and missile delivery technologies and know-how. (Export controls may not always be the optimal strategy for dealing with these problems, however.) Imposing multilaterally agreed sanctions for violations of international agreements or norms of behavior. NEW TARGETS FOR NATIONAL SECURITY EXPORT CONTROLS The panel believes that to be effective, nonproliferation controls must be focused only on narrowly proscribed military activities or items that are required directly for weapons systems and must include, to the extent practicable, verifiable end-use assurances. Lacking such specificity, efforts to
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment control exports of proliferation-related technologies create a risk similar to that encountered in the case of CoCom controls on dual use technology—namely, imposing significant economic costs that may be disproportionate to their effectiveness. LIMITATIONS ON CERTAIN TYPES AND USES OF EXPORT CONTROLS The panel finds that the problem of how to impose reasonable limitations on foreign military sales, which is being exacerbated by the overcapacity of arms production worldwide, is a significant and troubling problem that is urgently in need of study. The panel concludes that the distinction between some foreign policy controls and national security controls is artificial. Serious consideration should be given to whether authority for export controls other than for reasons of national security or to implement the mandate of a responsible international organization or agreement can be justified in light of today's highly competitive international economy. COCOM: A NEW DIRECTION It is the judgment of the panel that the traditional CoCom objective of retarding the qualitative progress of Soviet military capabilities could be preserved while allowing for expanded, legitimate trade by shifting the focus of CoCom from an embargo on the export of listed items to proscribed countries to approval of items on a sharply reduced CoCom Industrial List, contingent on acceptable, verifiable end-use conditions approved by CoCom. The continued credibility of CoCom depends on the willingness of the members to recognize and respond to the new political, economic, and military realities. This requires that a new approach to control objectives be reflected in modified control practices and a higher threshold of military utility as a criterion for control. COCOM: A NEW ENVIRONMENT "Borderless" Trade within the European Community Given the complicated business of organizing and administering monetary and economic unification, it is unlikely that the European Community will want to add export controls to its responsibilities in the near future. Because establishing a system of license-free trade in CoCom is an important step in eliminating burdens on West-West trade, the adoption of the common stan-
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment dard elements of licensing and enforcement by all CoCom members should be a continuing U.S. priority. Third Country Cooperation Since its initiation in 1984, the CoCom Third Country Cooperation initiative has enjoyed only limited success: Few CoCom members have actively pursued such agreements; the agreements negotiated do not systematically cover all goods controlled by CoCom; and the cooperating countries exhibit uneven will in implementation and enforcement. The U.S. threat to restrict the export of certain high-technology items to countries that do not cooperate sufficiently with CoCom is hollow. U.S. export licensing statistics show that approval rates and average license processing times for exports to countries that do not cooperate with CoCom are not significantly different from those for cooperating countries. The panel believes that given the overall decline in the perception of the security risk posed by the Soviet Union and other WTO countries, combined with the increasing sophistication of goods produced in third countries, the prospects for improving third country cooperation are limited. To maintain current levels of cooperation, as well as to encourage expanded cooperation, it will be necessary to reduce the scope of CoCom-controlled goods and provide political and economic incentives for third country cooperation. COCOM: ADMINISTRATION AND MANAGEMENT The narrow focus of CoCom on an explicitly targeted group of countries and commodities has enabled it to function with relative effectiveness. However, the current secrecy surrounding the conditions that exist for the favorable consideration of exports subject to full CoCom review prohibits exporters from taking advantage of potential exceptions to a general embargo and discourages exporters from even attempting to establish trade with proscribed countries. Despite the obvious connection to military utility of the CoCom strategic criteria, the role of the national defense agencies of member countries in the CoCom list review process is limited and inconsistent. Moreover, industry participation in list review, although seemingly more influential than defense input by the other CoCom countries, is also inconsistent. Despite disproportionate attention to licensing and enforcement, the U.S. practice of resisting decontrol in the CoCom forum while removing licensing requirements for nonproscribed trade (e.g., broad general and special licenses) promotes the belief that the United States is not concerned with the positions of its allies and uses CoCom as a tool to gain economic advantage.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment Multilateral cooperation is an essential element in the effectiveness of any export control program. In addition, increased CoCom cooperation is necessary during this time of transition in Europe to ensure "equal economic footing" among all members while managing the redefinition of trade goals as they relate to mutual security. COORDINATION OF CURRENT NONPROLIFERATION REGIMES Perhaps the most important distinction between East-West and proliferation controls is that the United States is not in a position to exercise the same level of influence over the suppliers of items related to nuclear, chemical, and missile proliferation. Indeed, some of the potential suppliers of these weapons of mass destruction also are the targets of current control regimes. The number of participants in a nonproliferation regime and the nature of their relationship to each other affect the collective ability to specify control targets and mechanisms. As the number of participants increases and objectives become broader, the specificity with which targets and mechanisms can be defined declines. On the other hand, the impact of possible sanctions increases with the number of participants. The challenge is to define the objectives and obligations of control regimes so as to optimize their participation and scope without diluting their effectiveness. The choice of an appropriate mix of controls for managing proliferation risks is a complex and difficult problem that requires far more careful and extensive study than this panel or any other group has yet been able to conduct. When the United States (or any other country) is trying to exert international leadership, unilateral proliferation controls may be appropriate for short durations. To be effective in the long run, however, proliferation controls must be undertaken on a multilateral basis. Across-the-board licensing and screening of a broad range of items to numerous destinations will not be an efficient or effective way of controlling exports related to proliferation. Export controls should focus on a very limited set of items and on specific target countries. The United States should learn from its experience with East-West controls and work to ensure that, in developing a strategy for the management of proliferation risks, a broad and burdensome export control regime is not unilaterally applied to U.S. exporters. Nuclear Export Controls A strategy must be developed by which newly nuclear states are brought within the appropriate treaty structure and encouraged to cooperate in the export control arrangements corollary to the treaty. It is also important to
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment step up discussions with other Zangger Committee members to control the export of critical dual use items. Missile Export Controls The effectiveness of the Missile Technology Control Regime would be improved if conditions for approved exports and sanctions against the importing parties for violations of the export conditions were made standard among regime members and public. It is also important to include other major suppliers in the regime, but this is unlikely to happen, or to lead to greater effectiveness, until existing internal disputes are resolved. The future direction of this regime is clearly a trade-off between (a) attempting to identify and subsequently embargo specific nonpeaceful missile delivery systems in a very closed and limited environment or (b) more broadly and publicly defining regime goals and proscribed end uses in the global context. The nature of the regime will determine the attitude of nonregime countries toward cooperation. Chemical Export Controls The Australia Group has been operating as an interim mechanism in anticipation of completion of the Chemical Weapons Convention (CWC). The final details of the convention are still being negotiated, but the broad outlines are clear. The production and possession of chemical weapons will be banned (use is already banned under the Geneva accords). The convention will also likely hold signatory governments explicitly responsible for reporting to a secretariat on all international trade in specific chemical precursors. There is reason to be concerned that export controls related to the CWC, as well as the reporting requirements of the treaty, could impose significant costs on the chemical industry. Thus, it is important to ensure that the resulting system strikes an appropriate balance between the objective of limiting proliferation and the imposition of costs on the world's process chemical industry. It is especially important to ensure that the actual operation of the system is equitable. CHANGES TO THE U.S. CONTROL REGIME The panel has concluded that substantial reform will be necessary to achieve the goals of an effective U.S. export control process. The export control policy process should be reformed in order to achieve the following results: Policy issues are resolved in a timely manner and policy decisions are enforced by the executing agency.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment Views of relevant departments are heard and considered, and unresolved cases presenting significant policy issues are taken to a senior-level interagency group for prompt resolution. The system is made simpler, more open, and internally consistent so that policymakers, administrators, and U.S. and foreign business can more easily understand it and work with it. The development of export control policy is well balanced, and industry and other affected parties have appropriate opportunities for input into policy formulation, including regulatory changes and list development. Policy Formulation Achievement of the above goals would be expedited by a process in which policy formulation is handled through a mechanism separate from that of policy administration. A clearer division of functions would help dispel the current confusion in the bureaucracy between policy formulation and its implementation. The arrangement for export controls should be part of the same apparatus for policy implementation that an administration establishes for any important component of national security. The relevant executive branch agencies should retain a strong voice in policymaking. The basic function of the policy mechanism should be to integrate the existing policy roles of the various agencies. Clear policy guidance should be established through firm presidential leadership, and a more rational administrative apparatus should be constructed for execution of policy established by the President. Administrative Alternatives The panel evaluated two basic alternatives for consolidating agency functions. The first alternative is to put administrative functions in a newly created administrative structure. The second is to consolidate functions in an existing department or agency. Given the progress that has been made so far in improving both policy and process, the panel concluded that it would be better to modify the current system rather than start anew. In several ways the State Department is not an optimal setting for an administrative agency. The State Department is oriented primarily to matters of high-level policy and foreign affairs, not the detailed work of a licensing bureau. Given its central mission, the Defense Department would not be sufficiently responsive to balancing military and commercial concerns, particularly in regard to exports of dual use items.
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Finding Common Ground: U.S. Export Controls in a Changed Global Environment The Commerce Department's Bureau of Export Administration, however, already handles—in dollar value—the great majority of cases processed by the export control system, and it has undergone considerable administrative improvement. Further, the agency has dealt with a broad spectrum of products and technologies, and it has a sophisticated and reasonably comprehensive regulatory scheme. Enforcement Issues In the area of sanctions, proposals have been made for certain agencies to take exclusive responsibility for enforcement of U.S. export controls. Opposing views over which agency should have primacy in various enforcement areas are indicative of broader problems concerning administrative responsibility for trade enforcement. Those problems extend well beyond the domain of export controls, however, and involve a number of enforcement bodies, including the Customs Service, the Drug Enforcement Administration, and the Office of Export Enforcement. Enhancing Industry Participation Greater balance and effectiveness in the export control system require a greater level of industry participation in the system. A process in which defense, economic, and foreign policy concerns are all coordinated into a cohesive U.S. policy must be further encouraged.
Representative terms from entire chapter: