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June 8, 1999 Tuesday, Final Chaser

SECTION: FRONT; Pg. A3

LENGTH: 555 words

HEADLINE: CLINTON MOVES TO EASE RULES ON OVERSEAS SALES OF COMPUTERS

BYLINE: By Peter G. Gosselin, Los Angeles Times

DATELINE: WASHINGTON

BODY:
The Clinton administration is preparing to loosen government controls on the sale of powerful computers to more than 100 countries only two weeks after a congressional committee charged the administration with carelessly permitting sales to China.

The Commerce Department has proposed easing restrictions on sales to most countries in Asia, Africa, Latin America and Central and Eastern Europe, administration sources said Monday. In addition, virtually all restrictions are likely to be lifted on sales to Poland, Hungary and the Czech Republic, which recently became NATO members . In a move that seems certain to anger U.S. computer makers, however, the administration will not ease restrictions on China and almost 50 other countries.

The split decision is a graphic illustration of the powerfully conflicting impulses that now grip Washington on the subject of exporting American technological knowhow.

Two weeks ago, a congressional committee headed by Rep. Christopher Cox, R-Calif., blasted the White House for unwittingly helping China update its nuclear arsenal by failing to halt suspected spying in U.S. weapons labs and, perhaps as important, not adequately restricting Chinese purchases of high-powered U.S. computers.

"This city wants to have it both ways - to ease export controls and tighten them at the same time," said Daniel Goure, a leading defense analyst with the Center for Strategic and International Studies in Washington. "It's a natural outgrowth of our being both the last superpower and the world's leading producer of high technology."

Administration officials said that the White House has yet to settle on how much to loosen controls on sales to Asia and other regions but that it generally agrees with industry claims that current restrictions have been overtaken by technological advances.

The government regulates the overseas sale of computers based on their speed, which it measures according to how many millions of theoretical operations they can perform in a second. To sell to the countries for which the administration is preparing to ease restrictions, computer makers must obtain government licenses for any machine that can perform more than 10,000 such operations per second. The industry wants the limit tripled to 30,000.

Administration plans to ease some export controls are almost certain to be viewed as a slap at the Cox committee's findings that China has obtained U.S.-made computers powerful enough to be useful for weapons design and other military purposes.

Although Cox has said in the wake of the panel's report that he still favors computer sales to emerging nations, including China, the report found that China acquired some of its advanced computers through third-party nations that resold American machines, something likely to become more frequent if restrictions are eased and sales to these nations grow.

If the White House follows through on easing controls, it will be the third time the administration has taken such a step. A wide array of independent analysts have argued that the United States has been forced to act because of the increasing availability of powerful computers from non-U.S. sources. But Republican critics have charged that the moves were motivated by a narrow drive to help American companies capture overseas sales.

LOAD-DATE: June 10, 1999