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5 June 1998
Source: Hardcopy The New York Times, June 5, 1998, p. A19.


Commerce Can Do the Job

Satellite exports are essential to U.S. security.

By William M. Daley
William M. Daley is the Secretary of Commerce.


The Senate Intelligence Committee began its hearings this week on the American satellites launched by Chinese rockets. Among the issues are whether our export control laws were violated and whether private companies committed illegal acts in the aftermath of the 1996 Loral rocket launch in China. Those specific charges should be investigated thoroughly, and if there was any wrongdoing it should be punished.

But it is simply untrue to suggest that the 1996 transfer of jurisdiction over communications satellites to the Commerce Department from the State Department jeopardized national security. In fact, that transfer completed a process begun by President George Bush in 1990 and encouraged by Congress. In 1990 and 1992, Congress passed legislation that would have transferred this jurisdiction, but the bills failed to become law because of other controversial provisions.

The transfer brought the United States into line with the licensing approach used by every other satellite producer in the world. Every satellite license the Commerce Department approved has had the unanimous approval of the reviewing agencies--the State and Defense Departments as well as the Arms Control and Disarmament Agency--and has been subject to the same level of technology safeguards as satellites licensed at the State Department. It has been made clear to exporters that under the license they could not transfer any rocket technology to a foreign country. Any such transfer still requires a license from the State Department.

Beginning in 1990, the Bush Administration reviewed items on the Munitions List, which required a State Department export license, to see if they should be moved to the Commodity Control List, which required a Commerce Department license. In President Bush's words, he wanted to make "export license decisions more predictable and timely."

The differences between the two are procedural. The Commerce Department must meet firmer deadlines for decisions on "dual use" items (those with commercial as well as military applications) and must include all relevant Federal agencies.

Yes, economic considerations play a role. Exports bring in billions of dollars and account for millions of American jobs, and the strength of our technology industries is critical to national security.

But contrary to what some have asserted, the Commerce Department's method of licensing is every bit as thorough and careful as that used by the State Department to regulate munitions. Satellite exports are governed by an executive order issued by President Clinton in December 1995, which gives these agencies the right to participate in the decision on any license application.

If there is disagreement, then cases move quickly to a committee of senior officials from these departments and agencies, which votes on the application. If the Pentagon, say, is unhappy with the outcome, it can take the case to the President--although such an appeal has never happened. Today, reviews of dual use licenses are more thorough and more careful than at any time in the past.

The broader issue is how our Government should regulate exports of high-technology goods. The most important issue is, as it should be, our national security.

But imposing the tightest possible restrictions on high-tech exports is not necessarily the best way to protect our security. In fact, our current policy--developed under the Reagan and Bush Administrations--recognizes that we must consider various factors in controlling high-technology exports.

The United States has a monopoly over very few technologies. Therefore, rigid export controls would not protect national security in a growing number of situations because the same products can be obtained readily from foreign sources.

Indeed, such controls would harm American security. Our high-tech companies would become less competitive globally, making them less able to produce the innovative products that our military and private businesses depend on. And to avoid export controls, some companies would undoubtedly move their research and manufacturing outside of the United States.

Take high-performance computers. These machines are essential to a modern military, but the Pentagon and American businesses do not buy enough of them to maintain a thriving domestic industry.

Without exports, the industry would be crippled, and in the long term, it would be unable to plow profits back into developing the next generation of even more powerful computers.

In short, we must consider the full ramifications of our decisions--including the costs of ill-reasoned controls that damage our technology base without protecting national security.