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4. COCON: THE EUROPEAN DIMENSION 4.1. Introduction: Like the F.~.G., the European Community (EC) rejects an approach which utilizes economic strength as an instrument of political confrontation with the Eastern bloc.178 This position arises in part from the extensive economic relations and significant industrial interests which have developed between the two areas. Throughout the 1980s, about 7.5% of the Community's entire external trade has been with CMEA countries.l79 Almost two thirds of the CMEA's total exports to the West go to the EC, while 50% of the CMEA countries' total imports from the West are of EC origin, which makes the EC the CMEA's most important trading partner (see Appendix A, Table 4). The structure of trade is rather complementary. Energy and raw materials, as well as semi-finished and agricultural products, constitute the bulk of EC imports from Eastern Europe, although the EC is also the largest Western customer for Eastern bloc manufactured products. Meanwhile, machinery and capital goods dominate the CMEA's imports from the EC. (see Appendix A, Table 5).180 Thus, like the F.R.G., the Community is more severely affected by restrictions on technology transfer than the 178 This was the unanimous position taken by the officials interviewed in the European Parliament as well as the Commission. 179 European Parliament, Directorate General for Research, Comecon in Figures, No.2 (January' 1990). 180 See European Parliament, Directorate General for Research, Comecon in Figures, No.2 (January, 1990), here, p.6. 75
U.S., whose main exports to the Eastern bloc consist of agricultural products.181 But the EC's policy towards the Eastern bloc is not based solely upon economic motivations. It also contains a vital political element, in that the EC strongly advocates the dual track approach embedded in the Helsinki Final Act and the CSCE process. In a recent communication from the Commission to the Council on the developments in Eastern Europe and the Soviet Union the Commission states that ''by lending its full support to the Helsinki process, while at the same time strengethening links with all its participants, the Community can help manitain stability and confidence which are essential conditions for peace and prosperity throughout Europe. Thisd implies closer Community coordination within the framework of the CSCE.~182 The support for such a strategy arises from Western Europeans geographical proximity to the Eastern bloc, its longstanding cultural and historical ties to the East, and from the belief that "increased economic, political, commercial and other contacts can create step by step a community of common interests leading to increased 181 Ausschuss for Wirtschaft, Wahrung und Industriepolitik, Stellungnahme zu den Beschrankungen des internationalen Technologietransfers durch die USA und deren nachteiligen Auswirkungen auf die industrielle Entwicklung der Gemeinschaft, Doc . 2-721/84, April 25, 198S . i82 Commission of the European Communities, Communication from the Commission to the Council: Implications of the recent changes in central and eastern Europe for the Co~uity's relations with the countries concerned, 1. 23 . 1990, SEC( 90 ) 111 f inal, here p . 8 . 76
rapprochement among the antagonistic blocs.~8183 In past years, the EC's approach has caused many conflicts with the U.S. over the proper policy responses towards the Eastern bloc. For example, unlike the U.S., the EC has denied the effectiveness of economic sanctions, and has relied upon political and diplomatic initiatives as its main instruments of influencing Eastern bloc behavior.184 The EC's differences with the U.S. were particularly evident in the case of the imposition of martial law in Poland. Only three month after martial law was declared, the European Council stated that the economic ties between the EC and the CMEA countries constituted a stabilizing factor in East West relations, and emphasized the need for the continuation of this relationship.~85 In taking this position, 183 Europaisches Parliament' SitzungsdoRmentel Zweiter Bericht im Namen des Ausschusses fur AuBenwirtschaftsbez iahungen uber die Ausfuhrbeschr~nRungen fur strategische Erzeugnisse und den Technologietransf fir zwischen den Vereinigten Staaten under der Europaischen Gen~einschaft, Michael Toussaint, March 29, 1989, Document A2-31/89Part-3; see also "Entschlie8ung zu den Beziehungen zwischen der EWG und den osteuropfiischen Staatshandelslandern sowie dem ~GW (Comecon), Doc. 1-531/82), Official Journal, No. C 292, November 8, 1982, p.15 cont.; Politischer AusschuB, Stellungnahme fur den AusschuB fur AuBenwirtschaftsbezishungen zu den politischen Aspekten des Technologietransfers, Doc. 2-721/84, October 31, 1985; 184 See for example "EntschlieBung zur Bedeutung und den Auswirkungen von Wirtschaftssan~tionen, insbesondere des Handelsembargos und des Boykotts auf die AuBenbezishungen der E~G," Doc. 1-83782, Official Journal, No.C 292, November 9, 1982, p.13 cont. 185 Agences Internationale d' Information Pour La Presse, Gerneral Information, No.3341, March 31 1982; there were some minor sanctions against the Sov~et Union which we designed to show solidarity but in no way did they jeopardize the commercial relationships. 77
most EC members were motivated by a political interest in maintaining strong diplomatic relations with the Eastern bloc, as well as by an economic interest in avoiding the costs of economic sanctions. The cost accruing from economic sanctions would have been much larger for the EC than for the US; in addition, according to one estimate, the EC actually would have suffered greater economic damage than the Soviet Union itself.~86 4.2. Export Controls: A Common European Foreign Policy? Turning specifically to CoCom, the Commission has been less outspoken. The European Community is not a member of CoCom and has so far expressed no public interest in becoming one. This position conforms with the Community's established practice of leaving matters of national security in the hands of national governments. However, there are growing indications that further political integration is an important item on the post-1992 European agenda. For example, the recent initiative by France and the F.~.G.-to combine the initiative towards European :86 See Mathias Jopp, "Friedensicherung durch wirtschaftliche Zusammenarbeit? Die europaisch-amerikanische Kontroverse uber die Rolle des Handles in den ost-West- Beziehungen," in: Wolfgang R. Logy, Streitfall Frieden, Heidelberg: 1984. Another incident which revealed the fundamental differences between the U.S. and the EC was the transatlantic controversy over the natural gas pipeline. The EC protested the use of extraterritorial ity against its members and stated that the claims to extraterritorial jurisdiction of American law were in violation of the basic principles of international trade and an unacceptable interference in businesses which were located in Europe and thus under the jurisdiction of European law. See for example, Agence Internationale d' Information Pour La Presse, Europe Documents, No.1216, August 12, 1982. 78
monetary union with a move towards political union suggests that the moves towards political integration might come sooner than expected.187 This would force the EC to address the issue of a common foreign and security policy, which would include the question of a common policy on export controls. Unlike the Commission, the European Parliament has already proved quite outspoken on the issue of Cocom. In February of 1986 the Parliament passed a resolution188 which endorsed CoCom's role in preventing the export of militarily critical technology, yet strongly criticized the failure to liberalize CoCom restrictions in other areas.189 A second resolution in 1989 was equally critical of Cocom's administrative structure, the actual content of the list, and the process by which the list is reviewed (see Appendix 8, No. 1 & 2 for a copy of the resolutions).190 187 It remains to be seen to what degree this joint proposition by Francois Mitterand and Helmut Kohl to take a decisive step towards political union by calling a second intergovernmental conference that would decide on a timetable towards political union was more a tactical maneuver motivated by each politician's particular concerns or a genuine step towards political integration. i88 Resolution on Technology Transfer, Doc. A2-99/85, February 21, 1986. 189 For a copy of the resolution see Appendix; see also ''US-Beschrankungen des Technologietransfers verurteilt," VWD, 21.2.1986; Wolfgang Hoffmann, ttSchwarze Liste -immer langer," Die Zeit, 3.7.1986; 'tCocom. Ein Hauch van Inquisition," VOI-N, S.2.1986. 190 Resolution on restrictions on strategic exports and US- EC technology transfer, Doc.A2-31/89, April 14, 1989; for the report see European Parliament, Session Documents, Second Report drawn up on behalf of the Committee on External Economic 79
To sum up, the EP has cr:ticizec:t CoCom on several occasions and has urged the Commission to take a position on CoCom pol icy . However, given that technology transfer falls into the realm of national security, the Commission has until recently not addressed the issue of export controls in terms of a common EC secur ity po 1 i cy . 4. 3. Export Controls And Lee Mandate Of The Single Haricet However, export controls af f ect the EC not only at the foreign policy level . In fact, a more important aspect of CoCom is its ef f ect on the EC ' s common commercial policy . In recent years, CoCom has generated increas ing concern within the Commission and the European Parliament, due to the potential impact of export controls upon the process of creating a single market by 1993. As the Community moves towards the completion of this internal market, defined by an "area without internal frontiers in which the free movement of goods, persons, services and capital is ensured," two problems have emerged.191 The first relates to the barriers that continued export controls on intra-EC trade would impose on the free movement of goods after ~ ~992" . The second problem relates to the question of national dif ferences in export control policies . If the Relations on restrictions on strategic exports and US-EC technology transfer, Doc A 2-31/89/A and B. for the text of the resolution see Appendix. 19] Article 8A of the Single European Act, see '"Single European Act, " Bulletin, of the European Communities, Supplement 2/86, here p. 11. 80
mandate of the Single Market is to be fulfilled, it will be necessary to harmonize export controls --if they exist-- at the European level. With "1992" approaching, the EP has become increasingly concerned with the problem of continued export controls in a barrier-free market. One recently-passed resolution ''draws attention to the possible conflict between COCoM rules and the provisions of the EEC Treaty; calls upon the Commission to examine the compatibility of Member States' application of the COCOM rules with the provisions of the Treaty, and to bring the matter before the Court of Justice, if necessary.''l92 Similarl the Toussaint resolution of 1989 mentioned above "warns that Community integration in the areas most concerned, i.e. data processing, computerization, biotechnology, aeronautics and astronautics, new materials and telecommunications, must not be obstructed by unilateral action by individual COCOM members.''193 Both resolutions also mention the need to develop a common European export control system. For example, in the Toussaint . resolution the EP ''looks to the EEC to set up in parallel with the abolition of internal borders, an effective system to control exports from the Community which will clear the way for this unlimited and information between the United States and the EEC 192 See Resolution on Technology Transfer, op.cit. note , here p.10. the Toussaint resolution also draws attention to the conflict. 193 Resolution on restrictions on strategic exports..... op.cit., section 12. 81 ,Y,
by banning any illegal transfer to prohibited countries of products on the COCOM list.''l94 And the resolution continues by calling "on the Commission to submit to Parliament proposals concerning the principles that should govern transfers of technology between the EEC and the countries to which the COCOM list currently applies; these principles should be based upon the real industrial interests of Community countries and firms. The interviews conducted in Luxembourg with EP officials confirmed that the Parliament was intent upon pressing the Commission to resolve the basic contradiction between the Single Market and the continuation of export controls. Officials ware especially worried that individual members would use the mechanism of export controls to "roll back" the achievements of the internal market. As one official suggested, "if we continue to apply export controls, we get a similar situation that exists now between the Europeans and the U.S., and which has been condemned by the Parliament and the Commission on numerous occasions. Individual member countries just like the U.S. can control and thus withhold the free flow of technology within the EC.''196 Furthermore, given that member countries have different restrictions on high-tech exports, national export control policies would automatically become instruments of an industrial 194 Cite 195 Resolution on restrictions on strategic exports and US- EC technology transfer, Doc.A2-31/89, April 14, 1989, here sections 12 and 13. 196 Interview ~2
policy by creating advantages or disadvantages for industries trying to gain access to third country markets. On top of the contradiction between export controls and the Single Market, the recent developments in Eastern Europe and the Soviet Union have reinforced the opinion of EP officials that the entire CoCom export control system needs to be overhauled. As one official stated, "Cocom needs to be reevaluated in light of the economic and political reforms under way in the Eastern bloc.''l97 All officials agreed that Cocom is getting "less and less relevant," especially in the dual use area, which provides the foundation for building the infrastructure vital to East European and Soviet economic reconstruction. "We cannot possibly pump billions into these countries and at the same time deny such basic technologies that would enable them to built a modern telecommunications system.''l98 These statements are confirmed by a recently passed resolution in the EP that states "whereas there is a need to support the process of political reform by measures to modernize the economy of the Central and Eastern European . · . Countries" the EP "calls on the governments of member states and the Council to take rapid action to repeal all COCOM rules for Central and Eastern Europe and the USSR, which amount to a set of restrictions on trade and cooperation which are ill-suited to the present time and outmoded in light of the developments in Eastern 197 Interview 198 Interview. 83
Europe." (see Appendix B. No.3 for a copy of the resolution)199 When asked about the need to differentiate between Eastern Europe and the Soviet Union, respondents agreed that "politically it would be the wrong signal; if you want to help Gorbachev you cannot decouple him from Eastern Europe and the EC." But most officials agreed that it might be necessary to establish a safeguard regime that would monitor the end use of some of the technology shipped to the -oviet Union. The EP has also addressed the issue of nuclear safety and environmental pollution. Officials from the Parliament consider it in the vital interest of the EC to enhance the security of nuclear reactors in Eastern Europe and the Soviet Union. This position is reflected in the cooperative agreements to enhance nuclear rector safety that the EC --through Euratom-- has concluded with all Eastern European nations and the Soviet Union. Concerning the destruction of the environment, the most recent resolution on CoCom that calls for its abolition "having regard to the appalling state of the environment in the above countries, caused primarily by the use of outdated technology, and aware of the need for determined action to reduce toxic emissions in Eastern Europe.' (see Appendix B' No.3 )200 Given the EP's limited political clout, the reports and resolutions discussed above have had little influence on CoCom's 199 Resolution on C0COM, European Parliament, 4.6.1990, PE 139.833. 200 Resolution on COCOM, European Parliament, 4.6., 1990, PE 139.833. 84
policy. In fact, when the EP's Committee on External Relations requested a Cocom official to testify at one of its Hearings, CoCom never responded to the invitation despite numerous attempts to contact the Paris Bureau and despite the personal intervention of the Parliament's president. Yet it must noted that while the EP currently has little political power, both the Commission and the individual member states have committed themselves to enhancing the EP's power in the European decision making process in the near future.201 Thus, the parliament may become an important political force in determining the nature and extent of export controls after 1992. Furthermore, the EP's concern over CoCom has already led to a series of consultations with the Commission on these issues.202 In previous years, the Commission avoided making public statements on its position towards CoCom. More recently, however, the Commission has indicated that it is concerned with the possible repercussions of the CoCom export control regime upon the creation of the Single Market.203 In its 1988 progress 201 See for example "Tackling the democratic deficit," Financial Times, 3.14.1990; "In 9 Languages, Parliament Demands a Bigger Say," New York Times, 3.27.1990; the recent initiative by France and Germany for some form political union by the beginning of 1993 also envisions a greater political role for the EP. 202 The Metten report mentioned above led to a large scale inquiry by the Commission into the CoCom system as well as national export control systems in the EC. 203 Already in 1986 the Community recognized that Cocom pose a major problem to the completion of the Single Market, see ''Strategische Export Kontrollen und EG-Binnenmark~," VWD, 2.12.1986. 85
report, for example, the Commission states that it was "looking into the conditions under which frontier controls on Intra- Community trade in goods appearing on the Cocom lists could be abolished."204 This issue was raised again in the "Programme Of The Commission for 1989" in a more specific and unequivocal policy statement: "As far as internal frontier formalities other than those affecting individuals are concerned, transport controls on COCOM products must be eliminated."205 The Commission presented yet another more focused perspective in the next Progress Report. "Controls specific to the export of certain goods: export controls will no longer be feasible inside the Community. However, their disappearance must not create problems for the various policies which depend on inspections at the internal frontiers, particularly those concerning the protection of Member States' cultural heritage and the control of trade in strategic goods.tl2o6 The above statements clearly indicate that the Community will have to undertake some action as Europe approaches the completion of the Single Market. All Community member states 204 Commission of the European Communities, Completing The Internal Market An Area Without Internal Frontiers, The Progress Report required By Article 8B Of The Treaty, 11.17.1988, COM(88)650 final, p. 22. 205 Commission Of The European Communities, Program~e Of The Commission For 1989, Brussels: January 1989. 206 Commission Of The European Communities, Fourth Progress Report Of The Commission To The Council --d The European Parliament, concerning the implementatic: of the Commission's White Paper on the completion of the int=-nal market, 6.20.1989, COM (89) 311 final. 86
with the exception of Ireland are members of CoCom.207 Since Cocom is not an international organization and can thus not make binding decisions, members must apply export controls not just to third countries but also among themseives.208 This situation creates a potential conflict with the common commercial policy of the community, as defined in Article 113 of the EEC treaty: "1. After the transitional period has ended, the common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade as such those to be taken in case of dumping or subsidies." The EEC treaty, however, also contains a provision that trade in some goods can be restricted by individual countries. Such trade is governed by Article 223 which reads: 1. The provisions of this Treaty shall not preclude the application of the following rules: a ) No member State she l l be ob l i ged to supp l y i n f ormati on the di sc ~ osure of which it cons i ders contrary to the essent i a ~ i nterests of s ecur ity; b ~ Any member state may take such measures as it cons iders necessary f or the protection of or trade in arms, munitions and war material; such measures shall not adversely af f ect the conditions of competition in the common market regarding products which are not intended for specifically military purposes. 2 . During the f irst year after the entry into force of this Treaty, the Council shall, acting unanimously, draw up a list of products to which the provisions of 207 However, Ireland --neutral country-- has led to closely follow the export policies by CoCom 208 Until recently Cocom countries applied among them, selves the so cal led IC/D\t scheme . An exporter obtains an Import Certif icate from the importing country . Once the item in question has reached the importer a Delivery Verif ication certif icates issued which has to be returned to the export control authority of the exporting country. 17
paragraph l(b) shall apply. 3. The Council may, acting unanimously on a proposal from the Commission, make changes in this list." In order to assess the compatibility of the mandate of the Single European Act with CoCom, it is necessary to compare the list drawn up by the Commission under paragraph 2 with the CoCom lists (see Appendix B. No.4 for a copy of the list).209 The EC list consists solely of purely military goods and thus is roughly equivalent to the national munitions lists, which in turn are similar to the secret Cocom munitions list. Therefore, the exception contained in Article 223(2) does not cover dual use technology, and all respondents concluded that current export control practices by individual countries--with the exception of the munitions list--violate EC law.210 This has been confirmed by commissioner DeClerq in an answer to a question by an EP member regarding CoCom. According to the Commissioner, "the list drawn up under Article 223 is constitutive and exhaustive and not declaratory and, consequently, must be applied in a strict manner; the Article 223 list bears some resemblance to the 'munitions' category [of Cocom] but none at all to the other two 209 The list has been recently published in Towards A 5eLon~eE ~0~, A Report by an Independent Study Team established by Defence Ministers of Nations of the Independent European Programme Group (IEPG) to make proposals to improve the competitiveness of Europe's defense equipment industry, December 1986. 2~0 Interviews; specifically, the export control measures are similar in nature to quantitative restrictions which are prohibited by Article 30 of the EEC treaty. 88
categories.''21l A recent Commission paper also confirms that dual use products "do not fall within the scope of Article 223 of the EC Treaty. tt212 Another possible exception to article 113 could be based on Article 36, which allows restrictions on the grounds of "public security". However, these restrictions must be justified by demonstrating that the absence of restrictions would pose a risk that is proportional to the restrictions imposed. Based on interviews with EC officials, it is unlikely that most dual use goods would be able to qualify under Article 36 as posing a risk to public security. In addition, EC officials interpret Article 36 in a manner such that the burden of proof is on the controlling authority and not on the exporter, which re- emphasizes the primary goal of establishing the free movement of goods, capital and labor by the end of 1992.213 Given the above, all respondents agreed that some solution has to be found to reconcile the current discrepancies between the CoCom list and the EC munitions list. One obvious solution would be to enlarge the current EC 211 "Joint answer to the Written Questions No3015/86 and Nol109/87 given by Mr DeClerq on behalf of the Commission," Official Journal of the European Communities, No. C296/2, 11.21.88. 212 Note D' Information A La Commission, Acheve~ent De La Politique Commer~iale Dans La Perspective Ou Marche Unique, 1.9.1990. 213 Note the reminiscence of this article to the German proposal to shift the burden of proof in Cocom on the controlling authority and is also based on the idea on giving priority to trade. 89
munitions list to include dual use goods. In accordance with Article 223(3), the list can be changed through a unanimous vote of EC members. For several reasons, however, the enlargement of the list is unlikely to take place. First, paragraph l(b3 of the same Article contains a narrow definition of the goods that the EC munitions 11st may contain. Any expansion into the dual use area is likely to violate Article 223 in the eyes of the European Court of Justice. Secondly, from a commercial policy perspective, it is unlikely that the twelve member states could unanimously agree on an expansion of the list, since they compete with each other in the markets for dual use goods. Finally, most European nations agree with the F.R.G. that dual use goods and technology should be excluded from future export control schemes, especially in light of the current reforms under way in Eastern Europe and the Soviet Union. Another possibility that might resolve the discrepancy between the CoCom lists and the EC munitions list would be to rely on the increasing liberalization of Intra-Cocom trade in dual use goods. In the last few years, several Cocom countries have relaxed their controls on exports to ether Cocom members. The U.S., for example, has introduced the G-CoCom license.214 A similar system has been developed in France. The U.K. has also announced such a scheme under the Open General Export license, 214 More recently the U . S . has also announced that it will ~ i f t most export ~ icensing requirements to the EC within the next f ew months, see "US Nears East European Pacts On High-Tech Export Controls", Journal of Commerce, 3 . 2 . 1990 . 90
and the F.R.G. has introduced its own system that facilitates Intra-CoCom trade in dual use goods.2~5 Yet these types of liberalization measures are unlikely to resolve the contradiction between Intra-Cocom and EC export controls. For one thing, the individual country liberalizations apply to a relatively small number of goods. As a consequence, a large number of dual use goods would remain on the CoCom list and clash with the provisions of Articles 113 and 223. Secondly, by leaving the liberalization process to individual countries, member countries would likely violate paragraph lube of Article 223, which states that unilateral actions by members may not ''adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes." If EC members start liberalizing on an individual bases, they automatically create competitive asymmetries among themselves. In addition, such unilateral liberalizing measures would probably lead to a process of competitive deregulation among member countries, which should not be the basis for the reform of the CoCom lists. A further problem arises from the fact that after the creation of the Single Market, commercial policy with third countries will become the sole responsibility of the Community. Therefore, individual countries will not be allowed to decide on 215 "Pauschaigenehmigung fur West-West Handel," Handelsblatt, 2.S.1990; "Intra-Cocom Handel wird erieichtert, H~ndlesblatt, 4.4.1990. 91
export restrictions to third countries.216 Furthermore, even if national export controls beyond the munitions list were permitted, differences in the regulations and the way in which they are administered (application time etc.) would represent a form of industrial policy. Countries whose export control regime is more liberal would unfairly support their own industries' exports to third countries. Such unfair competition is entirely irreconcilable with the completion of the internal market. All these problems and contradictions indicate that the Community and the Commission have little choice but to get involved in the future of export controls within the EC. So far, the Commission has not yet decided how to respond to the challenges which CoCom presents to the creation of the internal market; nor has it determined to what degree it will replace the individual member states in administering export controls. This indecisiveness largely reflects the individual members' reservations about transferring control over an area of national security into the hands of the Community.2~7 This is reflected in the old controversy between the Commission and the Council over the scope of the common 216 Obviously this excludes the EC munitions list. 217 The other reason as to why the Community has not presented its own opinion seem to be some internal differences between two Directorate Generals (DG) that are primarily involved in this issue on how to react to the challenge of CoCom. They are DG I, which is responsible for external economic relations and DG IIT which deals with the completion of the internal market. 92
commercial policy.218 In its interpretation of the scope of Article 113, the Commission has always her ~ that any measure that restricts free trade to and from the EC falls within the competence of the Community. The Council, on the other hand, has ~nterpre-ted Article 113 to mean that only those measures whose primary goal is to limit the flow of goods to or from the Community constitute commercial policy. The Council' s approach ref lects the reluctance of individual nations to concede control to the Community over a policy area which af fects their foreign policy and security interests. However, the hi f f erences between the Commi ss ion and the individual countries have narrowed in the past year, especially with regard to dual use goods. All EC members agree that the threat from the Eastern bloc has dramatically decliner], and they are now less inclined to consider the export of dual use goods as undermining their national security. As a result, a shift in the position of the Council seems likely.219 Such a shift would strengthen the Community's ability to tackle the issue of export controls. Under any scenario, members would retain individual 218 See for example P . J. Kuyper, "New Developments in Trade Sanctions and Export Controls by the I:EC, mimeo. 2~9 See for example the inaugural speech of the West German EC-Presidency in the first half of 1988 by Hans-Dietrich Genscher head of the Council to the European Parliament, in "Genscher: COCOM-Beschrankungen gehen zu weit,i' Nachrichten fur den AuBenhandel' 1.21.1988. This would especially be the case if no progress were made in CoCom in the next year and the EC members would consider to use Article 113 as a way to circumvent the gentlemen agreement. 93
sovereignty over the munitions list as defined both by CoCom and the EC list. As to dual use goods, several scenarios are possible. If CoCom streamlines the present list to a core list which conforms to the exceptions granted under Article 223, then there would be no need for the EC to intervene, since the administration of export controls would fall in the domain of national sovereignty. However, most officials agreed that there will probably be a small residual list of dual use items which will not fall under the narrow definition of Article 223 ~ but whose exports EC members want to control for the foreseeable future. This would require the establishment of an EC export control regime, which would specify a Community list for dual use goods, and which would eliminate the remaining physical barriers to trade in those goods among EC me~bers.220 Yet while the goods on the EC list would be able to circulate freely within the Community, some control over their movements should remain. An inner control mechanism is necessary to guarantee the proper end use of dual goods and technology. It would also enable the EC authorities to track the exact path of any dual use technology on the EC list which left the common market without a previously approved licence. Most respondents agreed that such a control mechanism should utilize a 'paper trail" of accompanying 220 See also the Toussaint Resolution, Appendix B. No. here section 12 & 13. The creation of such a list would be complicated as it involves a whole series of complicated issues relating to the harmonization of technical standards and norms, better exchange of information on R & D, question of public procurement and many others. 94
documents, and should rely on the cooperation of the private sector in order to maintain a record of the ~ ocation and use of due 1 use goods . The ef f ective implementation of an EC export regime requires not only a common ~ ist but also common EC export control practices. This does not necessary ly require a new centralized bureaucracy at the EC level . Since national authorities wi ~ ~ remain in place to control those items that are exempted f rom Article 113, they will be in a position to administer the newly harmonized EC rules as well. However, given the current discrepancies in the effectiveness of individual countries' export control bureaucracies, some cooperative effort among the twelve is necessary in order to harmonize their export control procedures. The legal and organizational basis for an EC export control regime is contained in Article 125 of the Schengen accOr~.221 The prospects for such a harmonization are good, given the fact that a similar EC agreement in the area of chemical weapons precursors already exists. Since the early 1980s, discussions had taken place within the framework of EPC on ways to coordinate national policies on restricting the export of precursors to 221 The Schengen Accord was signed by West Germany, France, the Netherlands, Belgium, and Luxembourg in June of less. It would have abolished border controls between the signatories. However, concerns by the countries involved about the influx of East Germans led to the postponement of the pact that was to take effect on 1.1.1990. "Fears of German Influx Delay Pact on Open Borders, Financial Times, 12.11.1989. According to officials from the Commission, however, the treaty will go into effect in July of this year. 95
chemical weapons.222 H'--~ever, progress was initially impeded by some nations' fears that policy coordination would infringe upon national sovereignty in matters of security.223 The catalyst to action was the revelation that the West-German chemical engineering firm Immhausen exported what amounted to a chemical weapons factory to Libya. Within a little more than a month, a Council regulation was ratified which created an EC wide export control regime for chemical weapons Precursors 224 Export authorization was refused if "...there is reason to believe that products under consideration will be used for the development or production of chemical weapons or that there is a risk of their being delivered directly or indirectly to belligerent countries or to areas of serious international tension..." (see Appendix B. No.5 for a copy of the regulation). The case of the chemical weapons precursors demonstrates that once the necessary political will on the part of the individual EC members is created, it is possible to quickly institute an EC wide regime to control the export of sensitive goods . It seems likely that such political will is indeed present in the case of dual use technology. All EC members agree that the military threat emanat i ng from the Eastern bloc has 222 See for example EC Bulletin, No.3 (1984), section 2.4.3., p.SO; No.4 (1984) section 2.4.1., p.63; No5 (1984), section 2.4.2., p.lO4. 223 See EC Bulletin No.5 (1987), section 2.4.1. 224 See Council Regulation (EEC) No. 428/89 of 20 February 1989 concerning the export of certain chemical products. 96
declined drastically, and that as a consequence, the EC's primary goal should be to help the economic reconstruction process in the East through an infusion of high technology.225 This is supported by a recent Commuity statement on its future relations with Eastern Europe, "Economic, scientific and technical links will be developed and diversified. This cooperation wit ~ back up structural change in associated countire and help integrate them into the international trade system. Particular weight will be given to promoting transfers of technology and ecouraging investment . It 226 Thus it is probably correct to assume that there is limited resistance by individual nations to a Community wide effort to control the residual dual use list.227 In fact, at the EC summit shortly after the opening of the Berlin Wall, the 12 foreign ministers agreed on the need to ease CoCom restrictions on high 22S As one EC official stated, "It is impossible to give aid to Eastern Europe to help them develop their economies without giving them access to Ladvanced] technology", as quoted in "East Bloc Pot of Gold," National Journal, 2.10.199O, here p.314. For the Commissions perspective on the recent developments in Eastern Europe and the Soviet Union and its repercussions on the EC's relations to these countries, see Mitteilung der Kommission and den Rat, Auswirkungen der jungsten Vera~derungen in Mittel- und Osteuropa auf die Be 2 i ehungen der Gemeinschaft zu den dortigen Landern, Brussels, 1.23.1990, SEK(901111 fin. 226 Commission of the European Communities, The Development of the Community's Relations with the Countries of Central and Eastern Europe, 4.18.1990, SEC(90) 7}7 final, here p.4. 227 Interviews; this is also supported by a study of the various cooperation agreements that have been concluded between the Eastern Europe and the Soviet Union and the EC during the last year. 97
technology exports to Eastern Europe.228 Furthermore, the recent initiatives by several EC members to push forward with the establishment of a political union indicates the increasing willingness by EC members to cooperate in matters of foreign policy and even security. This is clearly indicated by the communique issued at EC summit in Dublin where the Community committed itself "to play a full part in the CSCE process; .... its central role ...should be fully reflected through appropriate represntation at the forthcoming CSCE summit and within future structures which may emerge within the Helsinki process or according to ther proposals recently pur forward."229 Finally, if by the end of 1990 CoCom fails to come up with a drastically reduced core list, EC member countries might actually welcome an initiative by the Commission to develop its own list based on article 223. ~~ "EC pledges aid to nations embracing democracy," Financial Times, 11.20.1989; "Les Douze Sont Favorables A On Assouplissement Des Restrictions Du CoCom A Declare Mme Cresson," Agence Europe, No. 5135, 11.20.1989. 229 Commission of the European Communities, The Development of the Conmunity's Relations with the Countries of Central and Eastern Europe, 4.18.1990, SECt90) 717 final, here p.7. See also "Presidency Conclusions," European Community News, No.2O ~ 4 . 30 . 1990 ); see also "France and West-Germany launch new drive for European union, " Financial Times, 4 .20. 1990; "Bonn initiative behind ambitious target, ~ Financial Times, 4.20. 1990; "Europeans To Seek New Union, " Washington Post, 4 . 29 . 1990; "Europe ' s Alliance Seeks Closer Ties, " New York Times, 4.29. 1990; "Paving the Way f or Po l i t i ca l Un i on, '' Journ a l o f Cc:~=nerce, 4 . I ? . I 9 g O . Another indication at increasing cooperation in Foreign policy area is the recent Franco-Ger~an initiative with regard to the Lithuanian crisis, see for example "Possible Compromise Signaled by Kremlin, " Washington Post, 4.29. 1990; "Moscow Endorses Paris- Bonn Effort In Lithuania Crisis, " New York Times, 4.29.1990 . 98
To sum up, there is a strong likelihood that the Community will get directly involved in addressing the problems created by CoCom regarding the creation of the Single Market. This raises yet another question that will confront EC and CoCom within the next year. As mentioned earlier, the EC is currently not a member of CoCom. However, if a residual list in the dual use realm is created at the Community level, the EC would be responsible for administering the residual list. Similarly, if EC members decide to use Article 113 as a means to divert responsibility for trade in dual use goods to the Community level, the EC would be the legal representative administering this segment of high technology trade. In both circumstances, the Community would have to become a member or at least an observer of CoCom. Whether the EC is in fact willing to do this is not quite clear.230 So far it has expressed no desire --at least not publicly-- to join.231 To the contrary, during a recent debate in the EP the current president of the Council Gerard Collins stated that the Council will not participate in CoCom.232 In addition EC officials emphasize that CoCom is not an internationally recognized organization. CoCom "has no legal 230 The EP has deplored "the fact that the Community ....has not been represented in one form or another" in CoCom. And has the requested the Commission to examine the possibility of the EC becoming a member, see Toussaint Report op.cit. note , here section 9(b) and (c). 231 This is further coplicated by the fact that Ireland is not a participant in Cocom either, but an EC member country. 232 Debate on the oral question by Mrs Randizio-Plath and Mr. Cot, 4.~.1990, Doc. B3-430/90 and 431/90. 99
existence and agreements reached in COCOM have consequently no legal status."233 This led many respondents to conlcude that the EC cannot enter into any kind of official agreement with Cocom.234 An additional problem arises because Ireland is not a member of CoCom.235 If the EC joins CoCom, Ireland would automatically become a member. Finally, the question must be raised whether the EC should join CoCom even if it could. The transformation in the Eastern bloc has dramatically altered the overall political and economic situation in Europe. The post World War Two European security order and its numerous support structures --including CoCom-- must adapt to these changes. Many EC officials agreed that the EC should focus on playing a constructive role in shaping the future of Europe, rather than joining an outmoded institution which derives its legitimacy from the continued existence of the Cold War. This would involve the creation of an entirely restructured export control regime that reflects the changing nature of East-West relations, as well as new security threats ~ . from novel technology and from countries that have not previously been the main focus of attention in CoCom. Although a discussion of these issues is not the focus of this study, the concluding 233 Note D'Information A La Commission, Achievement De La Politique Com~erciale Dans La Perspective Ou Marche Unique, 1.9.1990. 234 Intervies; this assertion is not entirely correct as the EC is also a member of the Australian group. 235 However, Ireland operates an export control system that is similar to that of CoCom. 100
section will sketch out some central considerations such a regime shout d take into account. 101
