5
The Changing Calculus of U.S. National Security Interests

The current U.S. national security export control regime, and indeed the entire multilateral control framework embodied in the Coordinating Committee for Multilateral Export Controls (CoCom), is an artifact of the Cold War, which has now ended. It was relatively simple during that period to identify potential adversaries and to respond to the threat with an appropriate mix of military, economic, and diplomatic initiatives. Today, the external challenges to U.S. national security are more complex.

First, many of the most difficult and urgent challenges, rather than being purely military in nature, are now often economic and technological. Although the United States is still by far the largest national economy, its international economic and technological position is far less commanding than it was a decade ago.

Second, the military challenge posed by the Soviet Union is reduced and substantially less offensively oriented. On the one hand, the size and configuration of the Soviet Union's strategic nuclear arsenal and its continuing modernization, together with still sizable Soviet conventional ground forces—until their removal over the next few years—require that the United States and its allies remain vigilant. On the other hand, because of progress on arms control and other aspects of U.S.-Soviet relations, as well as the dramatic internal political changes in the Warsaw Treaty Organization (WTO) countries, the United States and the North Atlantic Treaty Organization (NATO) have declared the Cold War to be at an end.1 The Western alliance is thus left in the ambiguous position of responding to the reduced threat through



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment 5 The Changing Calculus of U.S. National Security Interests The current U.S. national security export control regime, and indeed the entire multilateral control framework embodied in the Coordinating Committee for Multilateral Export Controls (CoCom), is an artifact of the Cold War, which has now ended. It was relatively simple during that period to identify potential adversaries and to respond to the threat with an appropriate mix of military, economic, and diplomatic initiatives. Today, the external challenges to U.S. national security are more complex. First, many of the most difficult and urgent challenges, rather than being purely military in nature, are now often economic and technological. Although the United States is still by far the largest national economy, its international economic and technological position is far less commanding than it was a decade ago. Second, the military challenge posed by the Soviet Union is reduced and substantially less offensively oriented. On the one hand, the size and configuration of the Soviet Union's strategic nuclear arsenal and its continuing modernization, together with still sizable Soviet conventional ground forces—until their removal over the next few years—require that the United States and its allies remain vigilant. On the other hand, because of progress on arms control and other aspects of U.S.-Soviet relations, as well as the dramatic internal political changes in the Warsaw Treaty Organization (WTO) countries, the United States and the North Atlantic Treaty Organization (NATO) have declared the Cold War to be at an end.1 The Western alliance is thus left in the ambiguous position of responding to the reduced threat through

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment expanded East-West cooperation and defense spending reductions, while at the same time needing to guard against the remaining Soviet military threat. Third, in contrast to the dramatic political changes in Europe and the improved East-West climate, significant and troubling challenges remain in other geopolitical areas, particularly a generally heightened potential for regional hostilities. Some of these regional problems—such as the recent crisis in the Persian Gulf—represent a direct threat to U.S. and international security; others threaten to spill over into broader international contexts. Many of these problems are driven or exacerbated by the proliferation of advanced munitions and dual use technologies related to nuclear, chemical, and biological weapons and to missile delivery systems. GROWING ECONOMIC AND TECHNOLOGICAL CHALLENGES The economic and technological challenges facing the United States have been widely analyzed for many years.2 As noted in Chapter 2, the following are among the most significant of these challenges. The changing structure of the global economy. The revolution in information and telecommunications technologies has facilitated the development of integrated multinational corporations that operate in worldwide markets. Multinational firms now have a much broader range of choices regarding the siting of research and development (R&D) and manufacturing facilities. This broader field of opportunity has also led, in some cases, to a relative loss of capacity in the United States in key technology areas (e.g., D-RAM semiconductors) as manufacturers have moved their operations off shore, or in some cases have left the sector entirely. A second result has been a blurring of the specific national identity of technologies and multinational firms, thereby potentially raising additional complications from the standpoint of nationally based export controls. The increasingly rapid global diffusion of technology. The search for new external markets, the siting of research and operating facilities abroad, and the growing strength and sophistication of technology development in other nations have accelerated the global diffusion of technology. Multinational companies constantly must transfer massive amounts of information to control and develop their international business. Moreover, technology transfer—frequently by license—to the host country also may be a condition of doing business. Such diffusion, however, also increases the difficulty of implementing effective export controls at the national level. Declining U.S. technological and manufacturing preeminence. In recent years, as the unique postwar period of unchallenged U.S. economic dominance has further receded, there has been widespread concern about

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment declining U.S. economic competitiveness. The enormous infrastructural and other advantages uniquely enjoyed by the United States following the end of World War II have now diminished. In fact, parts of the U.S. R&D and manufacturing infrastructure are now aging and in need of significant new capital infusions. Growth in productivity, at least outside of manufacturing, has been sluggish. Some believe that the economic union of Europe, combined with the political union of Germany, will create another economic juggernaut across the Atlantic, similar to that in the Pacific. In consumer electronics, for which the United States developed most of the breakthrough technologies, Japanese and European companies have largely displaced U.S.-owned manufacturing. Intensive international competition is beginning to emerge in almost every sector, including such advanced high-technology sectors as supercomputers, in which U.S. superiority was once unchallenged. Growing technological and manufacturing sophistication in Japan and the newly industrializing countries. In a series of industries—steel, automobiles, semiconductors, consumer electronics—foreign companies, in particular East Asian firms, have seized major shares of the U.S. market. Japan's high rate of industrial innovation, emphasis on process technologies to nurture manufacturing, and a tax system and import control regime that encourage long-term growth over short-term profits have brought it rapidly to the status of an economic superpower. The May 1989 report of the Department of Defense on critical military technologies stated that the United States had fallen behind Japan in key areas of semiconductors and microelectronics.3 Indeed, the involvement of the Defense Advanced Research Projects Agency in the SEMATECH semiconductor consortium reflects, in part, concerns about U.S. performance vis-à-vis Japan in the key area of semiconductor manufacturing. The so-called newly industrializing countries (NICs)—Hong Kong, Singapore, South Korea, and Taiwan—are now becoming industrialized countries. They have transformed their one-time dependency on aid and trade preferences—and reliance on low-cost, low-technology exports—into high-technology partnership and competition with American industry. The NICs have achieved impressive success in emulating the postwar Japanese example by focusing on the development and enhancement of indigenous R&D and manufacturing capabilities. The changing distribution of global economic and financial power. The United States became the world's leading debtor nation in 1986. Seven of the world's 10 largest banks are now Japanese.4 The United States continues to suffer large negative trade balances with Japan, South Korea, Taiwan, and some of its other major trading partners. The net effect of these and other changes has been a redistribution of economic and financial power.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment • The weakening of the U.S. defense industrial base*. Many defense officials have become concerned about the decline in the U.S. defense industrial base, which they argue can and already has led to certain vulnerabilities resulting from dependence on foreign (albeit cheaper) sources of supply. The Department of Defense has had increasing difficulty obtaining at reasonable cost U.S.-made goods and technologies needed to maintain its qualitative edge in weapons. Low profits, disincentives in the federal procurement system, and other government regulations, among other factors, are causing small-to-medium-sized U.S. companies to leave the defense sector in large numbers,5 and this trend is being accelerated by cuts in defense spending resulting, in part, from improved U.S.-Soviet relations. And the Defense Science Board has stated that the Defense Department and U.S. defense industry alone can no longer supply the military's needs.6 Moreover, in the past few years, numerous government studies have documented that the U.S. defense establishment is becoming increasingly dependent on civilian technologies. In the March 1990 Defense Department Critical Technologies Plan,7 17 of the 20 technologies cited were judged critical to both commercial and military applications. Indeed, in a reversal of past technology flow, innovations are now often "spinning on" from the commercial sector into the defense sector. The growing importance of exports to U.S. economic vitality. The United States remains the world's largest international trader, with manufactured exports of $289.7 billion and total exports of $363.9 billion in 1989.8 Exports have assumed growing importance to the U.S. economy, in particular to U.S. producers of manufactured goods. The United States is becoming nearly as dependent on exports as its major competitors, and therefore, its economy is becoming more vulnerable to the negative effects of export controls. Finally, the position of the United States in the emerging world order also is affected by domestic problems. These include (a) the continuing budget deficit, (b) low rates of personal savings, (c) high volume of credit-financed personal consumption (relative to most other industrialized countries), and (d) systematic underinvestment in the modernization of manufacturing infrastructure. Taken together, these challenges—problems with the 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—all have led to a *   The term defense industrial base refers to the complex of industries, skilled personnel, and technologies needed to manufacture today's—and tomorrow's—sophisticated weapons systems.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment growing realization that economic factors must be given increased weight in the formulation of U.S. national security policy. CHANGES IN THE TRADITIONAL SOURCES OF PHYSICAL THREAT While the economic and technological challenges facing the United States continue to multiply, the older problem of East-West conflict, featuring various types of Soviet military threat, has been reduced dramatically. The Soviet Union remains the only country capable of destroying the United States with nuclear weapons. While it still retains vast conventional arms and large standing armies, buffeted as they have been by ethnic turmoil in the Soviet Union and change in Eastern Europe, mutual force reductions agreed to under the 1990 Treaty on Conventional Forces in Europe (CFE), if implemented in good faith, mean that forward-based Soviet forces in Europe will be reduced to conditions of rough parity with those of the NATO countries. Moreover, the political context within the Soviet Union surrounding these residual strengths no longer bears any resemblance to the earlier circumstances of the Cold War, and trends under way promise further reductions in the external power and influence of the Soviet military, although it is likely to remain a substantial factor for some time to come. Changes in the Soviet Union and Eastern Europe The most far-reaching changes have come in Eastern Europe, where countries once in the thrall of the Soviet Union have destroyed, one after another, a Soviet-imposed political order and set about to create new democratic and market-based systems. It is a historic process whose timing owes much to the vast changes remaking the political face of the Soviet Union itself. For without the tolerance, and in some instances the apparent encouragement, of the Soviet leadership, the crumbling of the old regimes would not necessarily have been so early nor so swift. The shattered status quo in Eastern Europe has had two major consequences. First, the cohesion, indeed, the political foundation of the Warsaw Pact has been undone. German unification has eliminated the outer salient of the pact. Already the freedom of maneuver of Soviet forces in Germany is severely constrained, and by 1994 the forces are to be withdrawn entirely. In the meantime, Poland, Hungary, and Czechoslovakia, the core of the WTO, have all obliged the Soviet government to withdraw forces from their territory by the middle of 1991. Second, throughout Eastern Europe, even in countries such as Romania or Bulgaria, where the pace of democratization has failed to match that under way elsewhere, governments have adopted independent defense postures no

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment longer responsive to Soviet bidding. As a result, it is reasonable to assume that the WTO has lost its fundamental meaning as a military alliance and for all practical purposes no longer makes possible a forward-based, Soviet strategic offensive capability in Central Europe. Indeed, trends in Europe soon will foreclose the very possibility of stationing Soviet forces outside the borders of the Soviet Union. In addition, Soviet leaders, including the military command, have been thrown into doubt over where the borders will be behind which Soviet forces must withdraw. The Soviet Union has become a maelstrom of change. As its leaders struggle to overcome a deepening economic crisis and launch the country on the path of thorough-going economic reform, and as they strain to manage the now seemingly inexorable fragmentation of the Soviet federation, the nature of the Soviet challenge changes for those on the outside. No longer is the Soviet Union a cohesive, stable, disciplined entity. Nor will it soon be again. No longer does its considerable military power rest on a secure economic base and a political order capable of reliably mobilizing human and material resources. No longer does the Soviet Union preside over a docile, working military alliance. An equally important factor is that Soviet foreign policy under Gorbachev has, by all indications, undergone a radical transformation. From the arms control agreements it has concluded (and others that are under negotiation), to the cooperation it has provided in dealing with regional conflicts, the Soviet leadership appears to be approaching the core issues of the historic East-West conflict in a fundamentally different and more constructive fashion. Behind this satisfying evolution in Soviet behavior, there appears to lie a deeper rethinking (at least among the national civilian leadership) of the Soviet role in the world, the meaning and utility of military power, the nature of alliances and the basis on which they should be built, the place of multilateral cooperation and the contribution of international institutions, and the relations between the Soviet economy and the international economic order. As a practical matter, in the narrower sphere of immediate concern to this report, these changes have altered the intelligence and verification challenge facing the United States and its Western allies. In Eastern Europe, the transformation is almost total; most governments have largely severed their formal intelligence cooperation with the Soviet Union and have offered guarantees of nondiversion of technology to the Soviet Union and indicated a willingness to permit intrusive end-use verification.* 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 standing contracts, but it also believes that the larger pro- *   For further discussion of these issues. see Chapter 4.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment cesses at work are sure to erode the Soviet ability to acquire technology throughout the region. In the Soviet Union, too, the closed character of the society and the political system has undergone significant change. As a result of new on-site verification regimes embodied in recent arms control accords, including the 1987 Intermediate-Range Nuclear Forces treaty and the prospective Strategic Arms Reduction Talks (START) agreement, together with the explosion of technical, business, and private contacts with the outside world, 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. The Soviets have themselves begun to discuss the possibility of assurances against diversion of dual use items to the military. Although it is difficult, if not impossible, to trace the movement within countries of certain dual use items, such as microcircuits, the Soviet need for Western help in converting some military plants to civilian production—a trend the West should encourage—may well provide an opening to test various mechanisms for enduse assurance. Preventing war, primarily by political means, is now said to constitute the central objective of Soviet security policy.9 This new formulation both requires and enables a substantial reduction, disengagement, and restructuring of Soviet military forces. The offensive threat to Western Europe, inherent in the WTO's military doctrine and force posture, has been both disavowed by the Soviet leadership10 and undone by the political revolution in Eastern Europe, by successful completion of the CFE treaty, and by the expanded emphasis on the CSCE process. The military's traditional preparations for a counteroffensive are to be sharply contained, and military forces will not be expected to carry the sole or even the primary burden of Soviet state security. The prevention of war, the defense of the integrity of the Soviet Union, and the pursuit of Soviet international interests are to be accomplished primarily by political means. Soviet leaders now have increased credibility when they claim to seek a deliberate dissolution of the prevailing alliance confrontation and its replacement with cooperative security arrangements. Rather than conducting its security in confrontation with a coalition of all the industrial democracies, the Soviet Union is attempting a cooperative approach to the problem of mutual security with this coalition. In this regard, it has accepted the implication that this will require strict adherence to defensive military objectives. Given the vast scale of the economic and political problems facing the Soviet Union, whatever the evolution of its internal politics, any Soviet leadership will find it difficult to reverse these adaptations. But the ultimate success of this change in policy also will depend substantially on the continued support of the Soviet military.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment The same security logic extends to the other members of the dissolving WTO as well. Though the East European countries' swift progress toward democracy remains uncertain, their commitment to cooperative security policies does not. Whatever the character of the political systems that ultimately emerge, these countries are virtually compelled by circumstances to rely for their basic security on international arrangements for limiting military capabilities in Central Europe strictly to those required for the defense of national territory. They do not have the resources or the technical base to create independently competitive military establishments, and any effort to do so would conflict seriously with their efforts to work out productive economic relations with the West. The United States and other Western governments can assume reliably a powerful and enduring impulse in Eastern Europe for close, constructive cooperation on matters of security. As this report is completed, these changes in Soviet and East European policies have not yet been fully implemented. Until that occurs, Western responses appropriately will contain an element of caution. Nonetheless, these policy changes have been articulated clearly enough and are motivated sufficiently by compelling background circumstances that they already alter radically the context for Western policies on technology transfer, weapons export, and regional conflict. Whatever inclination the Soviets may retain to acquire Western technology (through both legal and illegal means) to support military programs, that objective clearly will have receded in relative priority. Moreover, it will diminish in significance for the West as the Soviet military establishment becomes further restricted and more defensively configured. As these changes occur, substantial opportunity exists for exercising direct Western influence on Soviet security policy through mechanisms of cooperation. 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. In other words, the West can move from an export control regime characterized by negative sanction to one characterized by positive inducement. Soviet Defense Doctrine and Military Force Deployment A separate concern from the broad societal changes sweeping the Soviet Union and Eastern Europe is the philosophy and doctrine that underpin Soviet military planning and their impact on current Soviet force deployments.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment Although final force dispositions and supporting doctrine are likely to be partially shaped by the evolving political and military situation in Europe, including the course of future arms control negotiations, fundamental changes are inevitable. Faced now with the prospect of no longer being able to defend forward, of having also to defend inside Soviet borders, and of having to do so with shrinking resources, the Soviet military is compelled to devise a new military posture. It would be naive to assume that the Soviet Union is any more likely than the United States to move to a strictly defensive military posture. As a great power, it undoubtedly will retain its ability to project force when it believes that its vital national interests or those of its allies are threatened. But Soviet military leaders speak regularly of a new defense doctrine, which they claim will be evident in their troop deployments, weapons development, exercises, and training manuals. Soviet forces are to be organized to provide the basic requirements of strategic deterrence and to ensure the defense of home territory against any threat of invasion by conventional forces. At the same time, although current Soviet capabilities remain great, the rapid pace of change in the Soviet politico-military posture has led to substantial and ongoing alterations in force deployments. The Soviets have already announced publicly—and largely carried out—a series of unilateral force reduction measures that are to be completed by early 1991. These include the following: Comparisons of overall conventional force deployments in Europe continue to reveal quantitative imbalances—albeit of a reduced size—between NATO and Soviet forces in Europe.11 Because the WTO is no longer functioning as an effective military alliance, current analyses compare NATO forces with Soviet forces in Europe, excluding the East European countries that are still nominal members of the WTO. Personnel: 500,000 troops are to be cut from the Soviet armed forces, of which 50,000 will come from outside the Soviet Union. The 450,000 troops to be demobilized inside the Soviet Union will include 190,000 from the European part of the Soviet Union, 60,000 from the south, and 200,000 from Asia. Force Structure: Tanks—10,000 tanks are to be removed from the European USSR and Eastern Europe. Artillery—8,500 artillery systems are to be removed from the European USSR and Eastern Europe. Aircraft —800 aircraft are to be removed from the European USSR and Eastern Europe.12 Under agreement with the new Czechoslovak government, all Soviet forces are to be withdrawn by June 1991. Indeed, Czechoslovak officials announced at the end of August 1990 that more than half of these forces (37,000 troops) already had been removed. Soviet forces are also scheduled to be out of

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment Hungary and Poland by the middle of 1991 under a similar formal agreement. 13 The WTO countries themselves collectively are committed to reducing conventional forces by more than 581,000 troops, nearly 13,000 tanks, and about 1,000 aircraft without reciprocal reductions by NATO.14 Moreover, the announced terms of the CFE treaty call for an equalization of weaponry in Central Europe and substantial Soviet troop withdrawals, 15 thereby virtually eliminating the possibility of a successful surprise attack. Indeed, the asymmetrical reductions called for in the CFE treaty would make the initiation of any major offensive action by the Soviet Union unlikely. In the Asian theater, the Soviets have begun to implement Gorbachev's stated commitment to withdraw 120,000 troops, including the demobilization of a substantial number of obsolete ships, tanks, and planes. Soviet force deployments have been reduced in Mongolia and along the Chinese border.16 At the same time, however, there is some evidence that the limited withdrawal of troops and equipment from Europe may have permitted a concurrent modernization of Soviet forces in Asia. Soviet force deployments in Asia have, in general, been more defensively configured and have not displayed the potential for preemptive offensive operations that the Soviet forces in Europe maintained prior to the recent change in political circumstances. It is significant, in this regard, that a recent Japan Defense Agency white paper details the actual reduction in Soviet land, sea, and air forces and concludes for the first time that Soviet aggression against Asian countries is now unlikely.17 A comparison of relative U.S.-Soviet strength in strategic nuclear forces reveals a more balanced picture than current conventional force comparisons.18 As has been the case for at least two decades, current strategic force deployments provide both sides with ample capability for implementing any of the various theories of deterrence that have been argued in doctrinal discussions of the subject. The modernization programs now under way on both sides will not radically improve these capabilities, nor will the reductions envisaged in the draft START treaty meaningfully diminish them. Current and projected strategic force deployments will amply support, moreover, the traditional objective of extended deterrence—that is, a credible retaliatory capability against a conventional ground attack. Since these basic deterrent and extended deterrent capabilities are not likely to be decisively affected by technical improvements or changes in deployment levels, and since trade in directly associated technology is not contemplated at any rate, the strategic balance has relatively minor immediate significance for export control policy. 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 WTO as a military alliance, and the emerging, defensive Soviet military posture in Asia, the panel accepts the conclusion

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment 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.19 Indeed, even if there were to be a change of leadership in the Soviet Union, it would take a very long time for a legitimate conventional offensive threat to be remounted, and such a mobilization would be easily observable by national technical means. 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. Economic Exchange with the East The question that arises is whether the West should use its considerable leverage—namely, trade, aid, direct investment, and technology transfer—to try to accelerate desired changes in Soviet and East European behavior and whether such measures would elicit a positive response. Even before the recent dramatic changes, the East European and Soviet countries were becoming increasingly vulnerable to the pressures of the international economy, and recent developments will make them even more susceptible to external economic forces. Most of the East European countries are attempting to transform themselves into market economies. Poland has embarked on a laissez-faire course. Hungary and Czechoslovakia are approaching economic reform at a more measured pace, but they will still face the transitional costs of factory layoffs and higher prices. Eastern Germany has been absorbed into the dynamic, market-driven economy of a reunited Germany. Companies from Western Europe, the United States, and Japan are increasing their commercial contacts with Eastern Europe and the Soviet Union. Although short-term prospects for economic growth in these countries are constrained by severe structural problems, many companies are now laying the groundwork for potentially lucrative future operations. Large enterprises, like Fiat and General Electric, are building new facilities in these countries. As of June 1990, the number of registered joint ventures between Western companies and Soviet partners had risen to 1,754 (as compared with 685 in June 1989), and about 350 joint ventures had been formed between Western enterprises and East European countries. Of the Soviet joint ventures, 541 (approximately 31 percent) were actually operating or producing goods and services, and another 162 ventures (approximately 9 percent), while not producing, were at least paying workers. Thus, it is reasonable to conclude that, as of mid-1990, a total of 703 Soviet joint ventures (approximately 40 percent) had tangible existence.20

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment Despite wariness by the United States and the United Kingdom, Western economic aid to Eastern Europe and the Soviet Union is significant and growing. The Group of 24 industrialized countries has pledged $14 billion in loans, direct aid, and technical assistance to Poland and Hungary, and it will provide additional help to Czechoslovakia, eastern Germany, Bulgaria, and Yugoslavia. The European Bank for Reconstruction and Development will direct its initial capital of $12 billion to private and state enterprises throughout Eastern Europe. Even the notion of targeting large-scale assistance to the Soviet Union has now become an acceptable subject of debate among the Western allies. The argument advanced for increased aid and economic intercourse with the East European countries and the Soviet Union is essentially threefold. First, aid and trade can act as catalysts to bring about or facilitate further desirable economic and social changes. Second, economic assistance and trade agreements can function in a more political context as a direct quid pro quo for specific concessions. Third, doing nothing—that is, failing to grant aid or permit trade—risks further serious deterioration of the internal political, economic, and social fabric of these countries, the consequences of which would be unpredictable and, most likely, undesirable. Instability in Eastern Europe (or the Soviet Union) is not in the West's interest; the orderly transformation of the economic and social systems of these countries is most definitely to the West's advantage. Events are inexorably drawing Eastern Europe into the economic orbit of the West. There is already discussion in the European Community about its evolving into a three-tiered system of current members, European Free Trade Association countries, and the nations of the former Soviet bloc. The implication is that Eastern Europe will become, at least economically, part of the West. The likely result of large-scale Western economic assistance will be greater East European (and, to a lesser extent, Soviet) integration with the West and a greater Western stake in the success of the economic and political reforms now under way in these countries. 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 the process of political and economic reform in Eastern Europe and the Soviet Union, thereby strengthening that region's stability and security. The PRC as a National Security Threat The panel did not devote as much consideration to the People's Republic of China (PRC) as a ''traditional" source of threat to U.S. national security

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment as it did to the Soviet Union and the other WTO countries, primarily because the Chinese have not posed the same degree of direct threat to the United States as have the WTO countries. Indeed, the decision of the United States in the early 1980s to assist China with its efforts to modernize signaled the fact that the United States no longer considered China a direct or immediate threat to its security interests. This was reflected in a substantial relaxation within CoCom of the restriction on strategic technology exports to China, generally known as the "China Green Line." At the same time, however, China has emerged as a powerful regional actor in Asia. It is now a strategic nuclear power with a well-developed ballistic missile delivery capability. China also maintains a significant conventional military capability that potentially could be used to threaten the vital interests of a number of close U.S. allies, including Japan, Taiwan, and South Korea, or to further other political objectives in the Asian and Pacific region. Moreover, the PRC continues to produce missiles and other weapons for international sale, and it has so far been willing to accept only limited constraints on its munitions export prerogatives. China apparently still sees the major threat to its national security as coming from the Soviet Union. It is unlikely to change that perception deployed at or near the northern Chinese border. Sino-Soviet arms control negotiations are now under way and may help to reduce further threat perceptions on both sides of the border. as long as substantial Soviet nuclear and conventional forces remain The current leadership is doing everything possible to bolster the flagging Chinese belief in communism. But China's internal situation is likely to remain inherently unstable as the struggle for power goes on, at least until a new generation of leaders emerges. In the meantime, however, the recent emphasis on economic modernization can be expected to continue. Thus, contacts and economic ties with the industrialized nations are likely to grow, despite the political uncertainties. At the same time, those in China who advocate a more open and pluralistic political system also will increase in number, again despite the repression of the post-Tiananmen environment. Under these uncertain and evolving internal conditions, the West is likely to maintain its wait-and-see posture before undertaking any further trade liberalization with China. Among other reasons, a cautious policy is warranted by the impending generational change in leadership, with its associated potential for further political upheaval. But it is also in the interest of the United States to nurture a deeper and more cooperative relationship with the current Chinese regime, including 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 de-

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment velopment for the democratizing East European countries and the Soviet Union may be desirable. As in the case of the former WTO countries, however, the rate of further change in U.S. and CoCom export controls for the PRC is likely to be governed by the stated foreign and domestic policies and actual practice of the Chinese government. Summary Findings and Recommendations on the Traditional Threat The threat presented by Soviet military capabilities has fundamentally changed. Conventional capabilities in Europe have been reduced and limited by the CFE treaty, and the possibility of surprise conventional attack in Central Europe has been virtually eliminated. The possibility of a fully mobilized attack has been dramatically reduced. Conventional capabilities in other theaters, such as the Pacific, also are being reduced. Nuclear weapons capabilities are essentially unaltered, but the potential for new reduction agreements appears to have increased. Together with United States, the Soviet Union is now attempting to move beyond the traditional paradigm of alliance confrontation to establish a new security relationship. The Soviets also have indicated their intention to integrate their economy with the international economy, based at least in part on market principles.21 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—at a minimum, to the level of the "core list" that was under negotiation within CoCom during the latter half of 1990—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 foregoing factors are part of a larger process of rethinking U.S. security policy, including possible fundamental changes in defense policy. The export control dimension of this new policy prescription is a mixed strategy: Encourage change and make further relaxation of export controls contingent on evidence of additional change. This policy should keep in mind the following elements: Continue to constrain access by the Soviet military to technology and end products that contribute significantly and directly to the improvement of weapons capabilities.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment Ensure that export controls do not impede the permanent conversion (or closure) of Soviet military industrial resources to the manufacture of products for the civilian sector. Encourage further positive changes in the security policy of the Soviet Union, including additional force demobilizations and redeployments. Encourage stable political and economic transition in the Soviet Union through a broadened process of democratization and economic reform. Maintain consensus with U.S. allies on the coordination of further liberalization of export controls on trade with the Soviet Union. Move progressively toward the removal of export controls on dual use items to the Soviet Union and the East European countries for commercial end uses that can be verified. THE ADVENT OF NEW SOURCES OF PHYSICAL THREAT During the past two decades, the attention of the United States, its allies, and indeed the rest of the world has been drawn increasingly (and often violently) to a range of complicated new politico-military challenges outside the East-West context. Some of these problems represent direct national security threats to the United States and the international community; others are of concern due to their potential to "spill over" into a broader international arena. Their common characteristics are that (a) they are exacerbated—or made potentially more dangerous—by the availability of certain types of dual use technology and munitions and (b) they are not dealt with effectively by existing multilateral control regimes. Among the most notable of these developments are the following: Expansion of regional conflicts initiated by regional powers. The danger has long existed that regional conflicts could escalate into broader international military engagements. But ready access to foreign-made munitions and new indigenous design and manufacturing capabilities have contributed to a growing threat that regional powers might attempt to take unilateral action on the basis of a perceived short-term military advantage over their neighboring rivals. The danger in this case is that the alliance commitments or overriding politico-economic interests of the United States and/or other international actors would draw them into the conflict. Many aspects of this scenario occurred recently in the case of the Persian Gulf. There seems little doubt that Iraq was emboldened in its decision to invade and annex Kuwait by the size, quality, and armament level of its army in comparison with those of Kuwait and the other regional powers likely to oppose its aggression. The response of the United States and the

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment international community to the Iraqi invasion demonstrates clearly the chain of events that can result in a broadened international involvement. • Regional instabilities exacerbated by the availability of technologies of proliferation concern. The proliferation of technical know-how and process equipment necessary to manufacture chemical and nuclear weapons and weapons delivery systems has increased the danger that long-standing regional rivalries in the Middle East, the Indian subcontinent, Southeast Asia, and South America could result in widespread loss of human life. Here as well, the United States and/or other nations could be drawn into such regional conflicts, presumably in an effort to prevent weapons of mass destruction* from being used and to protect their foreign nationals and financial investments in the country. Thus, a regional conflict that threatened to involve weapons of mass destruction could well endanger the broad national security interests of the United States and other countries. Extremist violence and state-sponsored terrorism. The diffusion of certain types of dual use technology (e.g., plastic explosives and sophisticated digital timing devices) and technical know-how, much of it available "off the shelf" and entirely legally, has heightened and expanded the danger that all countries face from terrorist violence by internal and external extremist organizations—some of them operating with the direct or indirect support of other governments. There is also the added (and growing) danger that terrorists could acquire weapons of mass destruction or smart/advanced weapons from countries that do not have well-developed mechanisms to protect their stockpiles of such weapons, or whose national politics supports the goals and objectives of terrorist violence, or that are seeking simple monetary gain. Regional Instability The end of the Cold War has led to a greater focus on regional conflicts potentially threatening to U.S. interests. Even before the collapse of the Warsaw Pact, many military analysts had judged that the likelihood of war in Europe had lessened considerably. In fact, this perception had generated calls for a major shift in the mission and structure of the U.S. armed forces toward the development of units light enough for swift movement to distant trouble spots (such as the Persian Gulf) and flexible enough to deal with the challenges of low-intensity conflicts. Although a detailed analysis of this issue is beyond the scope of this study, these anticipated changes in the U.S. military mission are related to the *   Weapons of mass destruction are defined for the purposes of this study as nuclear explosives, nuclear-capable missiles, and chemical or biological weapons, including those delivered by missile.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment heightened concerns about regional arms proliferation. Many regions of concern are also areas where weapons proliferation is most acute and involve countries toward whom the major powers often have differing export policies. An important adjunct of this intersection with the problem is state-sponsored terrorism, against which trade restrictions may have deterrent or punitive value. Although better relations between the United States and the Soviet Union have been accompanied by some progress toward reducing regional conflicts in southern Africa and Central America, other areas have been marked by greater tensions between regional powers. Throughout the Cold War, the Middle East was thought the most likely region to trigger a superpower conflict. With the substantial improvement in U.S.-Soviet relations—and with the decrease of military and financial support for certain Arab states by the Soviet Union and the East European countries—this particular specter has diminished considerably, although conflict in that region remains a major security concern. The fruits of this change were evident in the close consultation and cooperation between the United States and the Soviet Union during the early part of the Persian Gulf crisis. On the other hand, the Iraqi invasion of Kuwait and the Palestinian uprising in the Israeli-occupied territories have severely strained relations and heightened tensions among countries in the region and beyond. The fact that nuclear and chemical weapons and missile delivery systems are now part of the Middle East security calculus only adds to the danger posed to U.S. bases and allies in the region. The Indian subcontinent also has been threatened recently by the outbreak of large-scale hostilities. India and Pakistan, which have fought a series of wars since independence over still-disputed land on their borders, are upgrading their advanced military capabilities, such as short-and medium-range missiles. India has a proven ability to manufacture nuclear weapons, and there is growing concern that Pakistan may be in the process of adapting its nuclear energy program for military purposes. In East Asia, fears about weapons proliferation have added to the peril of continuing confrontation. Korea remains divided as a result of lingering Cold War antagonisms, and even as the United States withdraws some forces from South Korea and Japan, it is concerned about reports that North Korea is pursuing a vigorous program of nuclear weapons development. New forms of regional instability also could arise out of the disintegration of the Soviet Union, if that were to occur. Already, a serious and violent conflict exists between Armenia and Azerbaijan and, less directly, between Kirghizia and Uzbekistan. Moreover, not only is there a continuing risk of conflict between republics of the Soviet Union, but a further danger also exists that these tensions might spill over current Soviet borders and embroil neighboring countries.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment 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. Proliferation of Nuclear, Missile, and Chemical Technologies During the past 15 years, technologies useful in the construction of nuclear weapons, chemical/biological weapons, and missile delivery systems have been diffused to a number of additional nations. There is substantial evidence that India, Iraq, Israel, Pakistan, and South Africa may now or soon possess nuclear weapons capabilities. And the Iran-Iraq war provided graphic evidence of the use of missiles and chemical warfare on both sides. These capabilities in the hands of so many nations pose a direct threat to the security of the United States. There has been a steady diffusion of scientific knowledge, technical and engineering talent, and manufacturing ability in all areas of proliferation, and a concentrated group of nations have acquired the new capabilities. In fact, the most disturbing development has been the potential for expanded negative impacts created when countries acquire both the means of mass destruction and long-range delivery vehicles, such as ballistic or cruise missiles. Especially to the extent that this trend overlaps with increased concerns about regional instability, proliferation poses new threats to national and global security. NUCLEAR PROLIFERATION Efforts to control the spread of nuclear weapons to additional states have probably been the most successful of efforts in the three major areas of proliferation. Indeed, President Kennedy's expectation in 1962 that over 20 nations would develop nuclear weapons by the late 1970s did not come to pass. But trends toward development or expansion of nuclear capability in a number of countries require continuing efforts to strengthen the nuclear nonproliferation regime. While much of the information about nations attempting to move forward with efforts to develop nuclear weapons is classified, a number of published reports detail the nuclear activities of the "problem" countries.22 As noted, Pakistan is on the threshold of a nuclear weapons capability. South Africa reportedly is also close to or already possesses a nuclear weapons capability. It has been estimated that Israel has between 60 and 100 nuclear devices. Brazil and Argentina continue to operate unsafeguarded nuclear facilities. More recently, North Korean activities at its Yongbong nuclear facility have

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment caused some concern. Although North Korea signed the Nuclear Non-Proliferation Treaty, it has not concluded an International Atomic Energy Agency safeguard arrangement for its nuclear program. It is noteworthy that each of these nations has been engaged to some degree in regional conflicts. The pairings of traditional enemies or competitors, such as Pakistan and India or Iraq and Israel, create the possibility in the event of open hostilities for escalation to a nuclear exchange. MISSILE DELIVERY TECHNOLOGY The proliferation of nuclear weapons capability has been accompanied by the spread of missile delivery technology. The Iran-Iraq war focused worldwide attention on the dangers of such capabilities, and although many of the missiles exchanged during that conflict came from or were developed on the basis of technology supplied by either the Soviet Union or China, the ability to produce such missiles indigenously is rapidly becoming the norm, rather than the exception, in regional conflicts. The United States, the Soviet Union, China, and France have been the primary suppliers of missile technology. In almost every case, missiles were first obtained from outside suppliers, often under the guise of developing a national space program, and then modified by the acquiring country to upgrade the delivery system's capability. Earlier generations of missiles were highly inaccurate. Now, however, there have been substantial technical improvements in accuracy and range capabilities that pose a heightened threat to U.S. national security interests. CHEMICAL WEAPONS Prior to the Iran-Iraq war, chemical weapons were viewed largely in the context of East-West superpower stockpiles. The widespread use of chemical weapons in that conflict highlighted the growing global diffusion of these weapons. Allegations that Libya used chemical weapons in Chad and the revelation of involvement by West German companies in Libya's Rabta chemical facility also focused worldwide attention on the problem.23 More than a dozen nations besides the United States and the Soviet Union are thought to have access to chemical weapons. At least 11 other nations are suspected of trying to acquire such weapons, and another 11 are alleged to have attempted to obtain chemical weapons, although no official sources have corroborated such allegations. Table 5-1 lists the chemical weapon status of developing countries as of August 1989. Of the three types of proliferation technologies that have been discussed, chemical weapons have the highest probability of use because their design and production require a lower level of technical sophistication. In addition,

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment Table 5-1 Chemical Weapons Status of Developing Countries Known Probable Possible Alleged Iraq Burma Angola Afghanistan   China Argentina Chad   Egypt Cuba Chile   Ethiopia India El Salvador   Iran Indonesia Guatemala   Israel Laos Jordan   Libya Pakistan Mozambique   North Korea Somalia Nicaragua   Syria South Africa Peru   Taiwan South Korea Philippines   Vietnam Thailand Sudan   SOURCE: Aspen Strategy Group, New Threats (Lanham, Md.: University Press of America, 1990), p. 72. the widespread diffusion of such weapons raises the probability of their falling into the hands of terrorist groups. Work on creating an international chemical weapons treaty has been under way for a number of years at the United Nations Conference on Disarmament in Geneva. Although progress has been slow, this activity has been useful in working to "delegitimize" the use of chemical weapons. A binding international treaty is probably still several years away. Nevertheless, the international community has been sensitized to the horrors of chemical weapons, and this in turn has provided momentum for continued negotiations. Summary Findings and Recommendations on the Proliferation Threat During the past two decades there has been a continued proliferation of nuclear weapon related technology and missile delivery systems around the world, as well as a relatively rapid diffusion of capability to produce chemical weapons. Taken together, the growing capacity of many nations to develop and employ weapons of mass destruction poses new security threats to U.S. forces overseas and to the international community and, in turn, requires new and innovative policy responses. Such responses will require the creation of new multilateral 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.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment With this in mind, the panel makes the following recommendations: Proliferation of weapons of mass destruction, their delivery systems, and advanced conventional weapons is a U.S. national security concern and should be treated as such in U.S. law and policy. The principal focus should be on those proliferation problems—nuclear weapons, chemical and biological weapons, and missile delivery systems—that, in combination, have the potential to create expanded negative impacts. Control regimes should be tailored to the particular circumstances of specific proliferation threats and, to be effective, should be as fully multilateral (i.e., involve the maximum number of suppliers) as possible. Some of these regimes are likely to rely, at least in part, on properly fashioned export controls. Such controls should be targeted only on those technologies or products directly essential to the development and/or manufacture of weapons of mass destruction. NOTES 1.   "Final Declaration of NATO Summit Leaders," Associated Press, London, July 6, 1990. 2.   See, for example, U.S. Congress, Office of Technology Assessment, Holding the Edge: Maintaining the Defense Technology Base (Washington, D.C.: U.S. Government Printing Office, 1989); U.S. Congress, Office of Technology Assessment, Making Things Better: Competing in Manufacturing (Washington, D.C.: U.S. Government Printing Office, 1990); Michael L. Dertouzos, Richard K. Lester, and Robert M. Solow, Made in America: Regaining the Productive Edge (Cambridge, Mass.: The MIT Press, 1989); U.S. Department of Defense, Bolstering Defense Industrial Competitiveness (Report to the Secretary of Defense by the Under Secretary of Defense (Acquisition) (Washington, D.C., 1988); National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and National Research Council, Industrial R&D and U.S. Technological Leadership (Washington, D.C.: National Academy Press, 1988); Richard M. Cyert and David C. Mowery (eds.), The Impact of Technological Change on Employment and Economic Growth (Cambridge, Mass.: Ballinger, 1988); and Council on Competitiveness, America's Competitiveness Crisis: Confronting the New Reality (Washington, D.C., 1987). 3.   U.S. Department of Defense, Critical Technologies Plan (Report to the Committees on Armed Services, U.S. Congress) (Washington, D.C., 1989). 4.   "The World's One Hundred Largest Banks," Wall Street Journal, September 21, 1990, p. R29. 5.   U.S. Congress, Office of Technology Assessment, Arming Our Allies: Competition and Cooperation in Defense Technology (Washington, D.C.: U.S. Government Printing Office, 1990). 6.   U.S. Department of Defense, Office of the Under Secretary of Defense (Acquisition), Defense Science Board, Task Force Report on Defense Semiconductor Dependency (Washington, D.C.: U.S. Government Printing Office, 1987). 7.   U.S. Department of Defense, Critical Technologies Plan. 8.   Data from International Trade Administration and Bureau of the Census, U.S. Department of Commerce, 1990.

OCR for page 39
Finding Common Ground: U.S. Export Controls in a Changed Global Environment 9.   Statement of Soviet President Gorbachev at the 27th Congress of the Communist Party, February 1986; see also ''Political Report of the Central Committee," Pravda, February 2, 1989. 10.   Dimitri T. Yazov, Pravda, July 27, 1987. 11.   U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1990 (Washington, D.C.: U.S. Government Printing Office, 1990), pp. 72–102. 12.   Data adapted from Jane's Defense Weekly, November 11, 1989; U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1989 (Washington. D.C.: U.S. Government Printing Office, 1989), p. 62; Soviet Military Power, 1990, p. 96. 13.   U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1990, p. 96. 14.   U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1989, p. 62. 15.   See "U.S.-Soviet Accord on Europe Armies is Reported Near," New York Times, October 4, 1990, p. A1; "Arms Control Catching Up," New York Times, October 5, 1990, p. A7; and "Soviets Said to be Removing Arms from Europe Before Treaty," Washington Post, October 5, 1990, p. A20. 16.   U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1990, pp. 97–99; Allan Romberg, "The Future of U.S. Alliances with Japan and Korea," Critical Issues (New York: Council on Foreign Relations, 1990), p. 9. 17.   "Defense White Paper Says 'Soviet Threat' Fades," Tokyo, Kyoto News Service (Reported in Foreign Broadcast Information Service, FBIS-EAS-90-181, September 18, 1990, p. 10). 18.   U.S. Department of Defense, Office of the Secretary of Defense, Soviet Military Power, 1990, pp. 63–71. 19.   Statement of Secretary of Defense Richard Cheney at the White House, September 17, 1990. 20.   Alan B. Sherr, unpublished data in personal communication, Center for Foreign Policy Development, Brown University, November 29, 1990. 21.   See, for example, references to the so-called "500 days" speech by Soviet President Gorbachev in "500 Days to Shake the World" and "Russia Meets the Market," The Economist, September 15. 1990, pp. 13–14, 93–94; and "The Union of the States," The Economist, September 22, 1990, pp. 53–55. 22.   See, for example, Leonard S. Spector, The Undeclared Bomb: The Spread of Nuclear Weapons, 1987–1988 (Cambridge, Mass.: Ballinger, 1988); Leonard S. Spector, Going Nuclear (Cambridge, Mass.: Ballinger, 1987); and Janne E. Nolan and Albert D. Wheelon, "Third World Ballistic Missiles," Scientific American, vol. 263, no. 2 (August 1990), pp. 34–40. 23.   Regarding alleged Libyan use of chemical weapons in Chad, see Elaine Sciolino, "U.S. Sends 2,000 Gas Masks to the Chadians," New York Times, September 25, 1987, p. 4, and Michael Gordon, "U.S. Thinks Libya May Plan to Make Chemical Weapons," New York Times, December 24, 1987, p. 1. For German involvement in Libyan chemical weapons facilities, see Serge Schmemann, "Bonn Will Tighten Curb on Export of Deadly Goods," New York Times, January 11, 1989, p. 1.