US Eases Rules on Computers

EAST-BLOC TRADE

AFTER touring a computer store in Bangor, Maine, a group of Soviet businessmen were set yesterday to receive a Zenith laptop computer as a souvenir. A week ago, they wouldn't have gotten the machine out the door without an export license. But times are changing.

Last Tuesday, the United States Commerce Department officially lifted export curbs on many laptops as well as a wide range of desktop computers. This smooths the way for Western companies to sell more computer equipment to the East bloc - not to mention allowing the scheduled give-away at Bangor's Computerland outlet.

``From a technological point of view, this [rule change] is not a big deal,'' says Martin Kalin, president of M.K. Technology Associates, a Washington export licensing firm. ``What's significant is that the Department of Defense finally lost a battle over the issue.''

Defense officials have long opposed liberalizing computer export rules, arguing that small computers have military applications. Laptops, for instance, slip into a backpack and can be extremely rugged - perfect for a soldier who's dodging bullets while tabulating missile trajectories.

The Commerce Department doesn't argue with such points, although it wrote the new rules so as to exclude machines specifically designed for military uses.

According to Commerce, the machines that can now be freely sold represent ``middle level'' technology and are readily available in most parts of the world, including countries such as India and Taiwan, which don't participate in Western efforts to coordinate sensitive exports to the East bloc. Controlling exports of such equipment from the US is futile, according to this view, since they can be bought in so many other places. The Commerce Department is allowed unilaterally to lift restrictions on such items.

``It's impossible to control the sales of these systems,'' says a former Commerce Department official familiar with US export regulations. ``Some of these computers are even being put together inside East-bloc countries, not to mention India and Singapore.''

The decision to lift the restrictions, announced last month, sparked a tense confrontation between Defense Secretary Richard Cheney and Commerce Secretary Robert Mosbacher. What irked Mr. Cheney the most, say analysts in Washington, is that the Commerce Department took the action without first seeking Pentagon approval. In an effort to scuttle the change, Cheney lobbied President Bush while publicly announcing that he objected to lifting the curbs on these computers. In the end, however, the White House sided with the Commerce Department.

Meanwhile, the US was under heavy pressure from its allies to make the changes.

THE Coordinating Committee for Multilateral Export Controls (COCOM) is the group of 17 industrialized nations that work together to try to stem the flow of sensitive technology to the East. In the past, the US held a near-monopoly on many advanced technologies and easily dictated COCOM's direction. But in recent years, the technology has spread and US allies have grown more assertive in demanding more-flexible regulations.

In July, when the Commerce Department made the original announcement, it said it would only lift restrictions on certain types of desktop computers. This was later expanded to include laptops and even more powerful types of desktops - in what experts say was a successful bid to strike a compromise acceptable to all the COCOM partners. ``It's easier to enforce fewer items, but there's still clearly a need for controls,'' says Claude Barfield, director of science and technology studies at the American Enterprise Institute, a Washington think tank.

Indeed, many restrictions still apply to the export of small computers. The new rules specify, for example, that Western suppliers can only ship complete systems - not the components. This is supposed to make it harder to divert the materials to military uses. The new rules also keep in place restrictions on sales to countries such as Libya and Vietnam. In addition, there are still limits on sales to military and police organizations in certain countries.

It's not clear whether the changes will have much impact on the volume of computer sales to the East. The Soviets are hungry for Western computer know-how, but they don't have the hard currency needed to start importing large amounts of equipment.

For now, however, the Soviets appear to be making the most of the new opening. The group in Maine, for instance, specifically asked to meet business leaders involved in production and marketing of computer equipment.

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