result, the EAAA of 1985 attempted to micromanage the policy approach to be pursued by the executive branch by calling for the elimination of licensing requirements for the export of "low end" items to other CoCom countries and attempting to place specific limits on the ability of the executive branch to deny licenses in situations in which there was demonstrated foreign availability.*

Little more than a year later, the report of the National Academies' Panel on the Impact of National Security Controls on International Technology Transfer, otherwise known as the Allen report (after its chairman, Dr. Lew Allen, Jr.), was released. For the first time, the actual scope and extent of the impact of licensing on U.S.-manufactured exports was documented. According to the Allen report, the United States exported about $62 billion worth of dual use manufactured goods under validated licenses in 1985, which constituted approximately 40 percent of total U.S. exports of manufactures in that year.12 Moreover, a consultant working under the supervision of the panel estimated that the overall economic impact of export controls on the U.S. economy in 1985, as measured in terms of lost West-West export sales, lost East-West export sales, and other factors, was approximately $9.3 billion. These data, together with the report's blunt conclusions about the new global economic and technologic circumstances that confronted the country—and the growing importance of economic vitality to the overall security of the nation—appeared to provide the impetus for a thoroughgoing reappraisal of U.S. export control policy at both ends of Pennsylvania Avenue.

Then, not coincidentally, revelations about a major illegal sale of controlled technology made headlines just two months after the release of the Allen report. The Toshiba-Kongsberg affair, so named as a result of the illegal sale of a nine-axis, numerically controlled machine tool to the Soviet Union by the Toshiba Heavy Machine Corporation of Japan and the Kongsberg Vaapenfabrikk Corporation of Norway, neutralized the political pressure for meaningful change in the policy, while playing directly to the rising anti-Japanese sentiment in the Congress and among the general public. At its nadir, the drama was played out on the television nightly news, with members

*  

Export Administration Amendments Act of 1985, Public Law 99-64, 99th Congress, Stat. 120, 1985. The major aspects of the EAAA were that it:

  • Required the President to make certain determines and to consult with Congress in a more meaningful way before imposing foreign policy controls.

  • Included a "grandfather clause" to provide immunity for existing contracts from foreign policy controls.

  • Placed limitations on the Department of Commerce's power to deny applications for export of technology or goods that are available in comparable forms from foreign sources.

  • Eliminated the need for licenses on certain low-technology items that were to be transferred within CoCom countries and required the Department of Commerce to expedite further the review of applications for exports to CoCom countries.



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