Copyright © 1999
by Robert G. Morris
CHAPTER 6. Export Controls: Serious Science in Foreign Affairs
"The central traditional object of foreign policy has been that enigmatic and nebulous phenomenon: national security."
Charles W. Yost
Strategic
Science and Technology
Science and technology scarcely
made up even a domestic issue before 1939. The war changed everything
when governments realized that faster machines, better weapons, improved
communications, sensitive surveillance and ranging devices and synthetic
substitutes for a host of scarce materials could make the difference between
defeat and victory in a global conflict. At once science assumed
international importance, and policies for its development and utilization
received high priority. Directly, the war was decided by two scientific
developments: radar and the nuclear bomb. With only a slight stretch
of the definition of science, one could include a third development crucial
to winning the war: deciphering Axis Powers communication codes.
These developments did not win the war by themselves, but they helped tip
the balance overwhelmingly in the Allies' favor and at the very least shortened
the war and reduced casualties considerably. The uneasy peace from
1945 onward was kept in large part thanks to the deterrence of nuclear
weapon missile systems in both East and West and sophisticated surveillance
systems in space.
The realization of the practical
value of science was made all the more cogent by the East-West military
competition that began immediately after the war. As Europe and Japan
rebuilt their economies, economic competition among them and the United
States became intense. Science figured in so may of the new products
in weaponry, surveillance, communications, transportation and energy production
that it suddenly became a tool of national policy, and its use in international
affairs was not much later in coming. The United States established
new agencies such as the Atomic Energy CommissionAtomic Energy Commission
(later the Department of Energy) and NASA to handle some of the new scientific
discoveries and issues. Soon thereafter international coordination
of these national agencies and their foreign counterparts became advisable.
United States Legislation for Unilateral Export Controls
Shortly after the war the United States began putting into effect new legislation regulating exports in the name of national military and economic security. Many of the exports regulated were technologically advanced, like computers. The development and execution of this legislation remains to the present day a complex story. A brief outline here is sufficient to show the impact of science and technology as a foreign affairs issue in this area.
There were two main streams of legislation beginning with the Export Control Act of 1949 and the Mutual Security Act of 1954 (MSA). In 1960 the Export Control Act became the Export Administration Act (EAA). Both the EAA and the MSA have been amended. Earlier legislation existed. The Neutrality Acts of the 1930s required licenses for exports to belligerent nations. Their World War I counterpart was the Trading With the Enemy Act of 1917. Initially these laws pertained to munitions and strategic materials; exports to Japan of aviation gas and scrap metal were proscribed by legislation of the 1930s just before Pearl Harbor. As U.S. competence in technology grew, especially during World War II, U.S. export controls that applied to commodities in which the United States had a near monopoly dealt more and more with items having a large technology component.
The Export Administration Act has generally applied to three categories of exports:
Broadly speaking, the Department of Commerce has been the lead agency for cases under the EAA and the Department of State has fulfilled that function under provisions of the Mutual Security Act and its restriction of items on the Munitions List. The acts direct that Commerce and State consult with the Department of Defense, which has made a strong contribution to interagency deliberations. Legislation has been proposed and altered from time to time to change the role of the Defense Department.
Defense has handled security assistance programs and export of military equipment and technology that are not munitions. State administers the 1951 Battle Act governing mutual defense assistance and represented the United States on the Coordinating Committee (COCOM) regulating exports from NATO members and Japan (see below). The U.S. Nuclear Regulatory Commission has the responsibility for control of exports of nuclear materials.
Control on the basis of economics has varied. The MSA and the related International Traffic in Arms Regulations (ITAR) were designed to apply generally to military security but they have been interpreted to include economic security. On the other hand, the EAA from the beginning applied to items in short supply and items necessary to further foreign policy that easily encompassed items relating to economic security. In fact, the EAA's precursor, the Export Control Act, provided grounds for controls on items that could build up the importing nation's economic potential.
Treatment of technical data has varied among the acts and their amendments and over time. Originally, such data were controlled under the MSA but not under the EAA unless they were sold.
Intense interagency battles have been fought on the field of export controls. Commerce as a trade-promotion agency has generally favored fewer and less strict controls. Defense, as protector of national security, has often been more severe. In Congress partisans of the two departments and their respective constituencies have tinkered with the legislation to make it now more, now less restrictive. An appreciation of the complete legislative and administrative history of export controls is not necessary to understand the point that needs making here: The U.S. monopoly or near-monopoly on items embodying science and technology that could threaten U.S. military or economic security has brought about a set of nontariff trade barriers with foreign policy effects of lasting importance.
While the Commerce Department favored shipments to increase American trade and the Defense Department opposed shipments that could conceivably enhance bloc-country military capability, State tried to balance potential losses for U.S. security with potential gains in U.S. relations with importing countries. Indeed, one general belief was that Commerce always said yes, Defense always said no and State always said maybe.
Control of dissemination of technology to preserve security of economic advantage thus became an S&T issue with considerable domestic as well as international implications. The rise of export controls coincided with the Cold War and it is clear that the control legislation was to prevent misuse of the exports by the Soviet Union, Eastern Europe and China . Famous early cases involved computers for the Soviet truck plant on the Kama River and for the Soviet tourism monopoly Intourist (see below) as well as civil aircraft for China.
Proposed exports of so-called "dual-use" items presented special problems. Orthodox weapons and items clearly suited for use in nuclear explosive devices were strictly controlled. A myriad of components adaptable for either peaceful or hostile use challenged government officials charged with regulating exports. The U.S. exporter and the foreign importer always testified to the benign presumed end use of the suspect items. American exporters chafed under uneven export controls among the United States and its allies that proscribed an export from the United States, say, but permitted it from an ally.
Frequently patterns of exports to a particular country could be seen to comprise a set of items whose use could only be contrary to that claimed for each component separately. While each component could have a benign use, the combination pointed only toward fabrication or testing of an illicit item.
The United States tasked its diplomats and science officers to make démarches (diplomatic approaches) on these subjects in Germany, France, Pakistan, India, Argentina, Brazil and other countries in the 1970s and 1980s.
Not every export experienced difficulties attributable to a Communist-bloc destination. Economic considerations primarily seem to have threatened space technology exports to Japan. General Electric collaboration with the French firm SNECMA to produce a new jet engine stalled in part because it involved some U.S. military technology and in part because it would have built up the capability of SNECMA.
Export controls applied for the sake of protecting national security are subject to the criticism that they are instead protecting national industry. While the control may limit sales, it also limits the threat of foreign competition with items derived from the exported technology. Some exported technology may certainly be utilized: patents and proprietary information, for example. But high technology embodied in equipment and parts cannot be readily analyzed, copied and rebuilt -- the so-called process of reverse engineering -- particularly in the area of computers.
Critics have also accused the United States of protecting U.S. producers by delaying other member countries' export licenses in international forums like COCOM (see below) even when it cannot ultimately deny them. In addition government agencies have occasionally interfered in rather heavy-handed ways in international S&T conferences held in the United States, limiting attendance by foreign scientists. Based in law on the restrictions for export of technical data, such interference in scientific exchange before any data have been declared in the national security interest can pass into the realm of suppression of intellectual activity. When justified by export controls, this interference deserves close monitoring for its danger to such activity and also for the extremely bad publicity that always accompanies it with the international media and the international scientific community.
New technical issues arose
that needed technical input not traditionally available in the foreign
affairs community. The U.S. foreign serviceForeign service
is composed of superbly educated, highly intelligent persons, many of whom
actually know quite a bit about science. Some (about three percent
in 1985) even have science degrees. Nevertheless, the service itself
was organized on a basis that did not admit much specialization (even specialized
training in economics some foreign service officers [FSOs] may have needed
after recruitment is relatively new in the foreign service, dating from
the 1970s). The generalist was king, his breadth of knowledge paramount.
Congress emphasized the need to understand science in the execution of
foreign policy in general and export controls in particular only when it
added Title VTitle V to the 1979 Foreign Relations Authorization
Act, not when it created the new science bureau at the State Department
in 1973. Title V directed the bureau to report on science and technology
in United States foreign affairs.
Focal point of U.S. multilateral export control activity was the Coordinating Committee (COCOM), a loose organization of members from NATO countries less Iceland plus Japan. Interminable meetings of COCOM members debated controls of exports of strategic equipment from member countries to the Soviet Union and other bloc countries. In general COCOM tried to establish lists of proscribed items based on technical descriptions of their capability. Disagreement was often sharp if not bitter, and the United States frequently favored tougher restrictions than the other members. Needless to say, if countries could not agree on restrictions and implement them in their domestic legislation, many items for which no country had a monopoly could be offered for sale to any customer by some suppliers even if withheld by others.
In some areas like computers, where the United States had distinct advantages, it could dictate restrictions on exports since it was the sole source. In other areas, like numerical machine tools, there were many suppliers and the U.S. delegation in Paris, home of COCOM's small secretariat, had to rely on persuasion with countries like GermanyGermany bent on export by custom and inclination. The Ministry of Economics in Bonn was often more influential on this issue than the Foreign Office.
A case in the 1970s that caused an inordinate amount of fretting in the United States was the construction of the Kama River truck plant in the USSR. Hardly high-tech in itself, the plant used high-tech components including IBM computers. The Defense DepartmentDefense Department objected to U.S. participation on the grounds that the plant could also produce military trucks. Representatives of Defense have frequently used the argument that any export to the USSR that could be used by the Soviet military machine was unwarranted. Other countries rarely agreed with this view and were usually only too happy to export items they produced that were not on one of COCOM's controversial lists even if the United States unilaterally banned them.
Without the cooperation of COCOM the United States would have had less and less influence in the field of export controls as its own S&T monopoly inevitably faded in an increasingly interdependent world economy. The government, particularly the Defense Department, got little support in effecting tight export restrictions from American industry, since U.S. firms often observed that if they were prevented from exporting some item a firm in another country would be happy to do so.
At about the same time as the IBM export case pending for Kama River (involving only $10 million) there were two other computer cases for the Soviet Union (for Aeroflot and Intourist ) and three for the PRC, all for around the same cost. Two of these six were from IBM, two from Control Data, one from Burroughs and one from Univac. Objections to the Intourist export centered on the apprehension that the Soviet KGB could use the system as a tool to track citizens -- including dissidents -- as well as Intourist could use it to book tourists. The speed and capacities were very high for the time but now almost obsolete: 100-megabyte disks and 0.3-4 million operations per second.
A semiconductor case in 1974 that baffled some of the foreign service officers who were involved concerned export of CMOS (complementary metal-oxide-semiconductor) integrated circuit fabrication technology by the U.S. firm Fairchild to Unitra in Warsaw. The technique was state-of-the art and complex enough in itself to defy understanding except by technical experts; even harder to fathom was the likelihood of adaptation to military uses that required another order of magnitude of technical sophistication. Fairchild, of course, argued that there was no potential danger. The State Department technical experts thought the danger was small but greater than Fairchild maintained. State supported the eventual set of limitations and safeguards adopted that fell short of withholding or delaying mask-making, computer-aided design and automatic testing components of the technology that the Defense Department advocated.
At the instigation of the
COCOM partners, in 1995 twenty-eight governments (more than COCOM's members)
agreed to what was an extension of COCOM's export control mechanism.
This was known as the "Wassenaar Arrangement," named after the town near
The Hague where the negotiations took place. A small secretariat
in Vienna administers the arrangement for member countries. Its special
post-cold war pariahs are Iran, Iraq, Libya and North Korea.
Very much the same situation existed in the effort to control exports of nuclear goods and technology to countries not parties to treaties foreswearing construction of nuclear weapons. Lists of proscribed exports based on the Nuclear Nonproliferation Treaty (NPT) in effect since 1970 were clear but hardly inclusive of all items of potential misuse. The United States spent decades -- with help, of course, from other countries -- trying to refine the lists to reduce the threat of weapons development. Similarly, the United States has sought wider international agreement on limiting even permitted nuclear exports (like power plants) to countries that have all their nuclear facilities open to IAEA inspection. The NPT only requires that the exported technology is subject to inspection. The U.S. Nonproliferation Act of 1978 permits U.S. exports only to those countries with all their nuclear facilities open to inspection.
In the nuclear area as in
the general area of high-tech exports, there is a large number of "dual-use"
items. Such items could be used in the x-ray laboratory of a hospital,
for example, or in a plutonium processing facility or satellite reconnaissance
picture analyzers. Export of individual parts not prohibited has
also led to foreign assembly of a machine whose export as such would have
been turned down.
In 1982 the United States
began a long struggle to convince allies that missile technology should
also be controlled under what became known as the Missile Technology Control
Regime (MTCR). The reasoning was that missile technology allowed
delivery of nuclear weapons and was indeed almost a requirement for that
purpose. Agreement was barely obtained from the G-7 partners (in
1987) before the Cold War ended. Potential problem countries like
Argentina and Brazil had by that time reduced missile programs to save
money in harmony with peaceful goals of their civilian governments.
Despite the end of the Cold War, which has greatly relieved the pressure
from COCOM, nuclear and missile technology controls were advocated by many
who studied conditions in the Mideast and Asia.
Another vast area of contention was U.S. policy toward launch of foreign space vehicles. NASA and some U.S. firms have contracted to place foreign satellites in orbit, mainly for communication. Early U.S. rationing of launch services to preserve its monopoly backfired and caused a worldwide surplus of launch capability, although individual countries would surely have developed their own industry in time. Then after the Challenger disaster in 1986 NASA's space shuttle operation was shut down for almost three years.
Besides the United States,
countries that have developed launch capability include the European Space
Agency group, Russia and China. India and Japan have limited capability.
China offers the cheapest rates. Satellite manufacturers may have
to wait two years for a launch slot anywhere. In the decade 1988-98
there were 298 commercial satellite launches. In the decade 1998-2008
the number will be 1200.
President Reagan authorized U.S. satellite manufacturers to use Chinese launchers in 1988 while the NASA shuttle program was disabled. But a year later Congress passed a package of sanctions in response to the Chinese government's suppression of the pro-democracy movement on Tiananmen Square in Beijing. The law provides for national-interest waivers, however. President Bush used three waivers for nine launches, and President Clinton eight waivers for eleven launches of U.S. commercial satellites by the firm China Aerospace. Satellite launches have been included on the Munitions List subject to control by the Mutual Security Act because the satellite technology, particularly its signal encryption equipment, is delivered to a foreign country and remains under its control until the satellite is launched.
In 1993 China Aerospace subsidiaries sold missiles to Pakistan. The State Department, as the lead agency on MSA issues, sanctioned the subsidiary firms by barring U.S. satellite firms from doing business with them.
United States firms would generally prefer to have foreign launches regulated under the Export Administration Act, where Commerce is the lead agency. Commerce generally favors exports. State reviewed the issue in 1995 and ruled against the U.S. firms and Commerce. State, Defense and intelligence agencies agreed that satellite launches should remain on the Munitions List. In March 1996 President Clinton overruled the interagency committee and shifted responsibility for communication satellites to the Commerce Department.
Later it came out that one of President Clinton's waivers early in 1998 came about despite a Justice Department investigation to determine whether the U.S. firm Loral had improperly helped China upgrade its missiles after an earlier launch crashed. In 1996 a rocket carrying a Loral satellite exploded twenty-two seconds after takeoff. During the investigation of the mishap Loral may have offered information to China on rocket guidance without U.S. government approval. Regardless of the outcome of the investigation, this incident shows the rationale for regulating foreign launches.
The whole issue has been further clouded by charges that Chinese Aerospace directed campaign contributions to the president's party, the Democrats. All U.S. satellite firms make large political donations. Loral has been one of the Democratic Party's most generous supporters. Donations aside, the case of the Chinese launches points up how the drive for economic gain can blunt export restrictions and shape foreign policy.
End of Chapter 6.