Adjusting East-West trade
Americans interested in expanding world commerce and free trade should be alert to a debate soon to get under way in Congress. At issue: Whether lawmakers should adopt tough new national security restrictions regarding the sale of US goods abroad.
Unfortunately, any additional controls - as now advocated by many Washington officials - could drive a new wedge between the US and its European trading allies.
What has happened to bring the issue before Congress is the expiration later this month of the Export Administration Act (EAA). That law provides foreign policy and national security controls that enable the federal government to restrict the sale of US technology abroad - particularly to communist nations. Committees in both the Senate and House have now passed bills that would extend the EAA. The Senate measure would tighten national security restrictions. The House measure would ease current restrictions. House lawmakers expect to debate their version within the next week or so.
The Senate is expected to begin debate during the next several weeks.
The United States, of course, should carefully review exports to hold back supersensitive technology that might have obvious defense or national security implications. But often such technology is similar to what could be obtained from companies in other nations. And surely, the US would seem to have dubious legal justification for restricting the sale of goods or technology made by US subsidiaries operating abroad.
If the past few years have taught any lesson in the area of export controls, it would be that imposing trade restrictions provokes unnecessary ill-will between the US and its NATO trading partners. A prime example: the friction raised by the US ban on exports of gas pipeline equipment to the Soviet Union.
What, then, should lawmakers do about the Export Administration Act?
The more modest House measure seems preferable to the Senate bill. The House bill would extend the EAA for two years, rather than the six years provided in the Senate measure.
More important, it would ease export restrictions, while still providing essential safeguards when genuine national security factors are clearly involved in a particular sale.
The measure would prohibit the export of Alaskan oil and bar sales of goods to foreign embassies under certain conditions.
The House measure also includes a provision that would protect contracts that are currently in effect.
Trade restrictions could be imposed on existing contracts, but only if Congress or the president determines that such restrictions are necessary.
Overregulation of exports would be inconsistent with free trade.