LEXIS-NEXIS® Academic Universe-Document

LEXIS-NEXIS® Academic

March 27, 2000, Monday

SECTION: WORLD TRADE; Pg. 3

LENGTH: 779 words

HEADLINE: US exporters express concern over House bill

BYLINE: BY JACK LUCENTINI

BODY:
Exporters have hoped for congressional approval this year of legislation to relax U.S. export controls. But they're unhappy with a bill gaining support in the House.

An industry-supported Senate bill, meanwhile, has encountered Republican opposition and faces a questionable future.

House and Senate panels held separate hearings last week on proposals to change export-control rules designed to keep potentially dangerous technologies away from terrorists and unfriendly governments. The rules restrict exports of goods such as computers, sophisticated machining equipment and goods with military applications.

Exporters have attacked the current law as onerous and largely pointless. They say many of the restricted goods are available abroad already, and that the current law merely denies business to U.S. companies.

TWO BILLS

The Senate bill, the proposed Export Administration Act, would remove limits on exports of items that are widely available in other countries. It also would sharply raise penalties for violations.

A separate proposal before the House subcommittee on international economic policy and trade would increase penalties without easing controls on widely available products.

The House bill ""is very problematic,'' said Edmund Rice, president of the Committee for Employment through Exports and chairman of an ad hoc business work group focusing on export-control legislation.

""Increasing the penalties for violations on a system that is fundamentally broken, is a very questionable move,'' Rice said.

House members are considering one concession to exporters: reducing to 30 days from six months the notification that the president must give Congress before easing computer export controls.

The Senate bill is supported by the Clinton Administration, whose top export control official said last week that the legislation is unlikely to reach the Senate floor.

BILL IN "GREAT TROUBLE'

Paul Freedenberg, government affairs director for the Association For Manufacturing Technology, McLean, Va., said the legislation is in ""great trouble.''

""It's getting later and later,'' Freedenberg said. ""Time is wasting away. '' If the bill isn't passed in the current Congress, it will have to be reintroduced next year and the legislation's momentum may be lost, he said.

Rice said the bill still has a chance. ""Progress is not being made, but that doesn't mean progress couldn't be made,'' he said. ""There are people rushing to declare the bill dead, and that's premature.''

The Senate bill is opposed by Republicans led by Sens. Fred Thompson of Tennessee and John Warner of Virginia, who are seeking to weaken the bill through amendments.

Key points in the Senate bill are ""mass market'' and ""foreign availability'' provisions in the bill. These provisions would remove restrictions on exports that are widely available in other countries.

Gary Milhollin, professor emeritus at University of Wisconsin Law School and director of the Wisconsin Project on Nuclear Arms Control, told the Senate Armed Services Committee that those provisions are dangerous.

He said that in 1998, Iraq tried to obtain a supply of nuclear-weapons triggers from France, which would be considered ""mass market'' and thus exportable under the bill.

France declined to make the sale because of a nonproliferation agreement with the United States, Milhollin added.

EXPORTER CONCERNS

Exporters countered that the current law is too onerous. John W. Douglass, president and chief executive of the Aerospace Industries Association, said U. S. export controls caused a two-month delay last year in the sale of 35 flares to the Italian Coast Guard.

The flares were needed for illumination in the possible rescue of American pilots during the bombing mission against Yugoslavia that was going on at the time, Douglass said.

Defense Department officials, meanwhile, testified that the Senate bill wouldn't give them enough say in the export control process. The Defense Department view of allowable exports is more narrow than that of the Commerce Department, which would take the lead in administering export controls.

Defense needs ""a much stronger role in determining the propriety of removing items from export controls for any reason, including claimed foreign availability,'' said Donald Mancuso, the department's deputy inspector general.

The Export Administration Act would replace a law of the same name that expired in 1994. Major parts of that law are still enforced under a series of executive orders, and serve along with a patchwork of other laws as the legal basis of the nation's export-control system.

LOAD-DATE: March 27, 2000