Arms Control vs. Saving Jobs

Critics say the administration's high-tech export policy protects jobs but threatens global security

EARLIER this month, just before President Clinton embarked on his whirlwind tour of NATO headquarters, Eastern Europe, and the former Soviet Union, an odd group gathered at Washington's landmark Old Ebbitt Grill to protest the administration's stand on the manufacture, use, and transfer of weapons of mass destruction.

If the grill's dark, wood-paneled meeting place of lawmakers and lobbyists exudes Establishment, these scientists and lawyers, ex-government officials and feminists, security specialists and former arms negotiators are challenging it.

They are impassioned about the dire consequences of a weak United States position on arms control.

At the core of their concern is the conflict between Mr. Clinton's stated priority to be the beacon of global nonproliferation efforts and his vigorous drive to push high-technology, high-value-added American goods into overseas markets.

Many United States products, from chemicals to computers - so-called ``dual use,'' because they can have either or both military and civilian application - reap big revenues for exporters. As American industries suffer losses from defense cutbacks and canceled Pentagon contracts, they are scrambling to sell those goods abroad.

Clinton's advisers were ``at a fork in the road, and they chose jobs,'' says Kenneth Luongo, a member of the Old Ebbitt Grill group and an arms-control and international security expert for the Union of Concerned Scientists.

``The political guys are working this issue and they put the tangible - economics - way ahead of the intangible, the ephemeral -

nonproliferation,'' he says. Commercial Uses

``The ability to sustain this [economic] recovery depends on the ability to penetrate world markets,'' says Jeffrey Garten, commerce undersecretary for international trade. ``1994 will have to be the [year for the] most aggressive kind of trade promotion we have ever seen.''

``We need to have unimpeded access to technology to comply with the requirements of our industry,'' says Paolo-Tarso Flecha de Lima, Brazil's ambassador to the United States.

Many security experts express frus- tration over the Clinton administration's lack of focus on their issues. Michael Krepon, a former official with the Arms Control and Disarmament Agency, says he and his colleagues are uneasy because ``there's nobody on the president's national security staff who's doing any long-term thinking about arms control and nonproliferation.''

Mr. Luongo, who agrees, says the stress is on the economy. ``It's basically a jobs issue - that's how the administration is pitching it,'' he says, referring to the strong argument for decontrolling US exports in order to increase US competitiveness. But while the White House is anxious to boost export sales, it must consider ``what role it wants to be seen playing in clandestine weapons programs,'' Luongo says.

Most of the export initiatives emanate from Congress. In what some observers have described as a showdown between the country's national-security adherents and boosters for high-tech exports, congressional lawmakers have introduced legislation to liberalize controls on exports of cryptographic computer software. If passed, the bill would move jurisdiction over this issue from the National Security Agency to the Commerce Department.

The bill's advocates say the software capability is available worldwide from more than 500 sources and estimate that the restrictions mean up to $9 billion in annual revenue losses to unrestricted foreign software suppliers.

Opponents warn that US sales will only make it easier for nefarious entities - criminals, terrorists, belligerent governments - to do their work. The struggle is just one of countless considerations the US policymakers must grapple with as they try to balance economic needs with security.

``These [Clinton administration] guys think they can come up with a magic elixir that promotes jobs and works towards nonproliferation,'' Luongo says. ``They have not fully grasped the contradiction that they're living.''

Last year the Clinton administration unveiled its National Export Strategy, which Commerce Department officials say highlighted the need to liberalize export controls where it makes both commercial and national-security sense.

``One of the priorities of the president's National Export Strategy is to reexamine our export-control regime, and one of the byproducts was lifting the level for supercomputers,'' a senior administration official says.

``A lot of these laws were written in another era - that was when the only way you could buy anything of quality was from the US,'' he says. ``That's just not the case anymore. Many countries out there have huge significant technology sectors or capacities.''

But in the most developed technologies, the US is still way out front.

``Among the most important places where we can maintain or build our market share is in industrializing countries that need our high-tech or high-value-added products,'' the official says. ``Our greatest commercial opportunities are in emerging markets that have enormous infrastructure needs. In telecommunications, for example, that means switching equipment, fiber optics, air-traffic controls, and radar for airports.''

Is there a risk that this technology is going to be used to threaten US security? ``We have to remain vigilant,'' he says. ``While high-tech goods of many kinds are available from many places, we can never put ourselves in a position where our desire to compete threatens our national security.

At the same time, the message in the context of the National Export Strategy is that wherever we can compete better and still serve national-security needs, we should do it.''

Some nonproliferationists strongly contest whether US policymakers can follow through on such good intentions. At the very least, they say, it is imperative to slow transfers.

All the financial gains from export sales, they warn, can easily be wiped out by stepped-up defense spending to keep in check other potential enemy countries that are building up their arsenals.

One congressional staff member feels so strongly that he resigned from the House Foreign Affairs Subcommittee staff on International Security. Kenneth Timmerman says he left Capitol Hill last October, ``because the battle was lost.'' Troubled by what he sees as an industrial-export-lobby grip on both the White House and Congress, he says policymakers have abdicated their responsibility for export controls.

``The notion that the US should lead in stripping export controls away is the worst thing that could happen,'' he says. ``And it is a result of the extraordinary lobbying by the computer and electronic industries.''

Mr. Timmerman calls policymakers' decontrol of computer exports ``a dreadful mistake based on ignorance and folly, showing a dramatic unawareness of potential military use of the computers they put up for sale.'' Without strict limits put on exports, he says, ``there will be a net gain in proliferation that the Rafsanjanis, Assads, and Husseins of this world can only applaud.''

Others point to how such sales impinge on the new role of the US military. ``I think we ought to be very careful about what we ship overseas,'' says Ambassador Paul Warnke, a former director of the Arms Control and Disarmament Agency and chief SALT negotiator.

``Fundamentally, it can interfere with our own security and what we are trying to provide others,'' he says. ``Street gangs are armed with grenades in Somalia; in Bosnia there is the most sophisticated conventional weaponry....''

As a steady supplier of arms and equipment to developing nations, the US is the prime offender in making ``peacekeeping much more difficult for the industrialized world,'' Mr. Warnke says.

``Just ask anyone. It's easy to get around the controls. America's European and Asian friends are perfectly happy to accommodate requests for what is unavailable from the US,'' says an Iranian procurer of high-tech machinery. Negotiators from Brazil, among other nations, lament all the trouble, time, and cost they have to go through to secure US products. ``In the re-organization of the export licensing,'' Brazil's Ambassador de Lima says, ``we would appreciate it if the US would take into account the track record of the countries involved. We have not been at war for over 130 years, and we border 10 countries with whom we have good relations.''

Supporters of a strong export-control regime say that there should be careful review of Brazil and other purchasers, as well as the ultimate end users. De Lima protests that his country is already ``under enormous scrutiny,'' because it is not a signatory to the Non-Proliferation Treaty, yet it belongs to a much tougher regional pact.

But the concern goes beyond the purchaser - it extends to third-party destinations. Brazil, among many other nations, supplied Iraq's military apparatus with technology and know-how. The ambassador is quick to put this in context: Compared with what US, British, and German companies did, he says ``our role in materiel sales was irrelevant,'' he says. ``We did not supply more than 2 percent of ordnance to Saddam Hussein.''

``The Chinese, the Japanese, the Germans, the French - they're really here collecting information in a carefully planned effort to pick up US technology, modify it slightly, and sell it back to the US! Trying to stop this is like trying to stop the drug trade or the gun trade. It's just not going to happen,'' says Don Doll, a leading security specialist in the high-tech industry. Mr. Doll is more concerned about what is slipping away from US manufacturers at home. Acquiring sensitive technology does not necessitate going through laborious export negotiations, he says, because foreign entities set up shop in the US. ``Their military and intelligence organizations are oriented toward industrial espionage,'' he says.

But US producers are competing against themselves, he says, ``because a lot of technology and know-how gets out, even though it's proprietary.'' Given the current patent and copyright process, Doll adds, ``not all the information that's lost is actually stolen. It's taken legally because of our transparency.''

Proponents like Warnke insist that the controls should be ``very, very strict,'' but others say this is folly, given that the technology and materials in question are readily available from sources around the globe. While would-be US exporters anxiously wait five to six months for licenses, their international competitors gain ground. ``How do you get a customer to wait six months for licensing?'' ask Michael Walls, senior assistant general counsel for the Chemical Manufacturers Association (CMA). ``It would be one thing if the US had these products exclusively.'' He points to an economic study that calculates a $30-billion annual loss in manufacturing export revenues because of government controls.

``A year ago, one of our member companies had a proposal to build a plant in Iran for the manufacture of triethanolomine, of which hydrogen cyanide is a byproduct,'' Mr. Walls says. This dual-use product - it can be used as a component in shampoo or in poison gas - ``is widely available around the world,'' says Walls, who is impatient with the regulation of chemical exports ``regardless of the costs to US business.''

Lobbyists from CMA and elsewhere, such as the powerful National Association of Manufacturers, are intent on drawing the federal government away from the notion that the US must take the lead on limiting dual-use products, ``regardless of the impact,'' Walls adds.

``There is a fatalism about the inevitability of nuclear proliferation,'' security-expert Luongo says. He scoffs at the assertion that because the most sensitive US defense capabilities were developed on personal computers, which are widely available everywhere, there is no point in limiting our sales of computers. ``Time is our ally in nonproliferation,'' Luongo says. ``Why are we giving [weapons developers] an advantage by helping them fast-forward their programs?''

But if America's industrialized trade competitors are selling the same goods in the global marketplace, how can US policymakers reconcile the lost business opportunities?

``You don't,'' Warnke says emphatically. ``It's a question of leadership. You just say we're not going to get in that business. At the end of the cold war, we have to reevaluate our positions, but the idea of propping up defense industries is not only silly, it's immoral.''

``There is an incentive for companies to comply with export controls in the short term: avoiding costly penalties. In the long term, it's to stave off a tougher export-control policy pushed by policymakers,'' says Tyrus Cobb, president of Business Executives for National Security, a private, nonpartisan group of corporate executives. ``It all boils down to this,'' Walls says. ``Do we want dual-use products to be supplied by American companies that are required to comply with laws and create a paper trail for their transactions, or do we want products coming from other countries that have no checks on their export?''The recently approved sale of a $10-million Cray Research Inc. supercomputer to China will put such US monitoring to the test. The Clinton White House acceded to Beijing's longstanding request to purchase the powerful computer for use in weather-monitoring. Given its possible use in less benign applications, the administration has attached what it calls adequate, but undisclosed, conditions on the use of the technology. In a Washington Post article, Sen. John Glenn (D) of Ohio ran down the long list of China's work in production and sales of nuclear, chemical, biological, and conventional weapons. ``When a major power disregards the rules of the nonproliferation game, as China has, either the world community reaffirms the rules or the global regime loses,'' he wrote. In most circles, however, the Cray sale has been lauded as an appropriate way to build goodwill between the US and the Asian giant. China's economy, the fastest growing in the world, represents staggering opportunities for high-tech and value-added producers. ``We're the ones opening things up for business,'' the senior administration official says. ``This administration has a dramatically better record of helping businesses than does the previous administration.'' Luongo's optimal new-and-improved export administration act would prevent the Cray supercomputer from reaching China. It would enhance sanctions against countries and entities that violate agreements not to use certain products for military use and impose strict controls on technology sales. ``What is the president going to be better off doing in 1996?'' Luongo asks wryly. ``Going to Cray Research Inc. and telling workers how he triumphed in his efforts to ease export restrictions or saying `Gee, I'm sorry you have to lay off half of your work force, but China won't be able to export nuclear technology as a result.' ''

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