US offers foreign companies a `gold card' to help speed high-technology trade
The Departments of Defense and Commerce will soon be peddling their own ``gold cards.'' In an effort to boost American competitiveness and stop high-tech goods from being diverted to unfriendly hands, the government Tuesday announced a new, faster process for licensing high-technology exports destined for Western trading partners.Skip to next paragraph
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The ``gold card'' -- the unofficial, unpatented nickname for the system -- would give reliable companies in approved countries a license number. Once certified, the foreign company would not have to apply for a United States export license every time it wanted to import, say, a minicomputer. It could also re-export the minicomputer to another approved country (generally in Western Europe or Japan) without getting another export license from the US, which it must do now.
US export controls on high technology have long been a thorn in the side of American exporters. The delays in getting licenses have put them at a disadvantage vis-`a-vis their more fleet-footed competitors, such as the Japanese. The new process, says Nathaniel Leff, a professor of international economics at Columbia University business school, should assuage the problem somewhat: ``Will it result in dramatic changes? No. Will it result in some deals being made that would not have been made? Yes.''
He notes that even dramatic changes in the international trade picture, such as the fall in the dollar, are not solving America's trade deficit. But it will take away a psychological impediment for foreign companies, he says.
Under the present system, it takes about 11 days to get a license for an export to, say, France. The gold card (or ``certified end-user'') process, which will likely take effect this fall, would cut the time to one or two days, says Paul Freedenberg, assistant secretary of commerce for trade administration. He figures it would pare the number of licenses that Commerce must approve by 20 or 25 percent, affecting some 10,000 to 20,000 foreign firms.
That, in turn, would allow the US to tackle more sensitive exports, such as those going to the East bloc or Soviet Union, more quickly. Licenses for exports to the East (either directly from the US or through third countries) could take 30 days instead of 60, he figures.
Companies in Coordinating Committee countries (CoCom) -- which include NATO countries, excluding Iceland and including Japan -- would qualify for the gold card right off the bat. They would need to be recertified every two years. Firms in the East bloc, the Soviet Union, China, Cuba, Iran, Vietnam, and other restricted countries need not apply.
The proposed system could stave off other proposals being considered in Congress and the administration. ``There are other proposals around . . . that would undermine national security even more,'' says Stephen Bryen, deputy undersecretary of defense for trade security policy.
One would be to shorten the controlled list by a ``radical amount.'' Another would give up licensing products to CoCom countries, and rely on them to make sure the goods didn't get to unwanted hands. Both are more distasteful to the Defense Department than the gold card.