which exports are laundered. Ultimate end users are falsified, goods are surreptitiously moved from one location to another, and there is little accountability or overall control. While citing the existence of the trading companies, most agreed there was little, if anything, that could be done to control them.

VISIT TO MACAO

The delegation made a one-day trip to the Portuguese territory of Macao. Macao's current status is that of a Portuguese-administered enclave of the People's Republic of China. Portugal will withdraw entirely in 1999. Even though Portugal is a member of NATO, export controls do not exist in Macao. The territory borders on one of China's special economic zones, and traffic flows freely from Macao to China. In addition, there is almost constant waterborne traffic between Hong Kong and Macao, and few, if any, customs inspections. Unlike Hong Kong, Macao appeared to the delegation to have little indigenous high-technology industry.

MEETINGS IN THE REPUBLIC OF KOREA

Government Officials
MINISTRY OF FOREIGN AFFAIRS

At a meeting at the Ministry of Foreign Affairs (MFA), officials confirmed Korea's willingness to adopt some form of bilateral export control relation with the United States. However, it appeared that negotiations toward a ''5(k) agreement"* had not progressed quite as far as previously had been claimed.

Much of the meeting was spent talking about the Soviet Union, Eastern Europe, and North Korea. The MFA vice minister discussed the Korean perspective on the Soviet Union and Eastern Europe, which is very different from that of the United States. The United States has a global concern about Soviet strategic capabilities and the diversion of technology from Eastern Europe to the Soviet Union. South Korea is most concerned about North Korea and about the Soviets as the major arms supplier to the north. In light of the recent political developments in the Soviet bloc, South Korea views Eastern Europe as no direct threat and as a potential new market for cheap consumer and middle-technology items. Korea would like to improve relations with the Soviet Union and the Eastern bloc as an important way to get those countries to moderate their support for North Korea. Given the state of the North Korean economy, a cutoff of Soviet and East European aid,

*  

A bilateral export control agreement between the United States and a non-CoCom, non-Prescribed country.



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