After a showdown between the Pentagon and the State Department, US officials are pushing ahead with measures that would make it easier for American companies to sell military technology and equipment overseas.
The new export rules, still being ironed out by the State Department, would streamline the approval process and allow nonclassified military sales to Britain and Australia without a license. A similar agreement is likely to be finalized with Canada later this summer, according to a senior State Department official.
Most immediately, the new rules are expected to help the US defense industry, which has had to rely more and more on exporting over the past decade.
But the changes also could have the greater significance of prompting more collaboration between American and European defense firms, and possibly leading to cross-Atlantic mergers, analysts say.
"I expect to see a lot more joint ventures in the future," says the State Department official. "Certainly one of the things we're trying to do is make sure certain [military] forces on both sides of the Atlantic are using the same technologies."
Arms-control advocates, however, criticize the rule changes, of which there are 17, saying they could lead to more proliferation and the spread of dangerous technologies to dangerous countries. Britain and Australia, for example, do not have export controls as tight as those in America, and they could potentially sell US technology to third parties.
America revoked similar export privileges for Canada last year when that nation was found to have transferred US helicopter and armored-personnel-carrier equipment to Iran.
Indeed, even regulated exports are hard to control. Lockheed Martin Corp. agreed to pay a $13 million fine this week for selling satellite technology to China in 1994 (although the company did not admit guilt).
"The concern is less with complete systems than it is with technology and know-how," says Erik Floden, an arms-control expert at the Washington-based Council for a Livable World Education Fund. "It's ridiculous to think the technology we spill into Europe won't spread."
Furthermore, Mr. Floden says, the trend toward overseas consolidation will only add to the spread of dangerous technology - information that could one day end up in the hands of terrorists or rogue states.
Senate Republicans on the Foreign Relations Committee have criticized the change in State Department regulations on similar grounds, and are threatening congressional action to stop it.
It remains unclear whether the State Department changes need legislative approval.
"We're trying to be as transparent as possible with the Hill," says a State Department spokeswoman.
But the State Department was not always in favor of all the export reforms. According to government and industry sources, Secretary of State Madeleine Albright resisted the new status for Britain and Australia. She was overruled, however, by the White House, Pentagon, and National Security Council.
In an effort to persuade the State Department to agree to the changes, a provision was made that would require exempt countries like Britain and Australia to bring export controls to a level acceptable to the US. And only approved companies in those countries could purchase US-made components using the exemption.
State Department officials began preliminary talks with British officials this week.
Defense-industry representatives applauded the changes, which were announced last month. In recent years they have pressed for reform of export controls, which they say are too rigorous and time consuming, and often scare away business.
The State Department, for example, processes 45,000 licenses a year with just 18 officers. "This should help reduce the amount of licenses you need, which should reduce expenses and time," says Joel Johnson of the Aerospace Industries Association.
Since the end of the arms race with the Soviet Union, the defense industry has been hurt by sharp declines in US procurement, forcing manufacturers to turn elsewhere. In the aerospace industry, 31 percent of sales now go overseas, according to Mr. Johnson, up from just 7 percent in 1989.
"We want to treat more countries like we treated Canada in the past," says Lawrence Skibbie, president of the National Defense Industrial Association.
Other allies will be considered for exemptions if they agree to meet the higher export standards, the State Department official says. Industry sources say Germany, Norway, and France have already expressed interest.
(c) Copyright 2000. The Christian Science Publishing Society