LEXIS-NEXIS® Academic Universe-Document

LEXIS-NEXIS® Academic

July 2, 1999, Friday, Late Edition - Final

SECTION: Section A; Page 4; Column 3; Foreign Desk

LENGTH: 1188 words

HEADLINE: U.S. Relaxes the Limits on Exports of High-Speed Computers

BYLINE: By DAVID E. SANGER

DATELINE: WASHINGTON, July 1

BODY:
President Clinton today greatly eased restrictions on computers that American companies can export to countries like Russia and China, arguing that advances in technology have made laptops and full-size personal computers just as powerful as the supercomputers of just a few years ago.

Mr. Clinton's decision was a victory for American computer makers, which had lobbied aggressively for the change so they could export machines unfettered by regulations that have hindered their ability to make money overseas and have given their foreign competitors a big advantage. Under the old rules, exports of machines with high-speed computer chips were restricted because they could be used for military purposes, including the simulation of nuclear explosions and design of jet fighters. But high-speed chips are now so widely available that they are common in machines sold in computer stores and over the Internet.

Although Congress officially has six months to review his decision, most elements of Mr. Clinton's order go into effect immediately, which will allow the Chinese military -- and military-related groups in the Middle East, India, Pakistan and the former Soviet Union -- to buy computers from American manufacturers.

So far, even some of the harshest critics of the leakage of nuclear technology to China have not objected to the Administration's actions. The front-runner for the Republican presidential nomination, George W. Bush, appeared to agree with the Clinton position as he raised money today in Silicon Valley in California, where he encroached on a political turf long cultivated by Vice President Al Gore. Page A14.

Mr. Bush said that "the current system of export controls is broken," adding that, "Too often it penalizes our high-tech companies by controlling technology that is widely available from other countries while failing to prevent unique technology from falling into dangerous hands."

In a statement today Mr. Clinton said that maintaining the current controls "would hurt U.S. exports without benefiting our national security." His Commerce Secretary, William M. Daley, held a Sony Playstation aloft in the White House press room today, and said that unless the controls were eased, a powerful new version of the popular game machine available this Christmas would be classified as restricted.

The widespread use of high-speed chips in everyday personal computers and games forced the White House's hand in the liberalization of the rules, the first since 1996.

But the fact remains that the new regulations will allow American manufacturers to sell abroad computers, without export licenses or Government review, that are as powerful as those used for nuclear weapons design a decade ago.

National security officials said the kind of machines currently used to simulate nuclear explosions, however, will remain strictly controlled.

"Our security concerns were heard at every corner," the Deputy Secretary of Defense, John J. Hamre, said today, when asked if America's commercial interests were trumping its security interests. But Mr. Hamre acknowledged there is no way to control the spread of ordinary machines that Washington had defined as restricted under the old rules, "which now are available in the tens of thousands per month or hundreds of thousands per month."

In fact, with today's move the Administration appeared to be changing its philosophy on export controls, virtually abandoning efforts to control mass-produced computer technology, no matter how powerful. Instead, it is focusing on the most specialized, high-end machines and software. "We need to focus our resources on products that are not widely available," John D. Podesta, the President's chief of staff, said.

Moreover, the definition of a controlled computer or computer chip -- the kind that require an export license to countries considered a "proliferation risk' -- seems very likely to change more frequently. Mr. Podesta said today that Washington would now review the limits every six months, and relax them further if they have become outdated by the pace of technological change.

Just a month ago, amid the revelations of spying and lax security at Los Alamos National Laboratory, it seemed unlikely that the White House would take the political risk of liberalizing the rules on computer exports. But the chief executives of several high-technology firms, from Lewis M. Platt of Hewlett-Packard to Andrew S. Grove, the chairman of Intel, made the case that unless the American rules were relaxed, billions in sales would be lost to European and Japanese manufacturers.

"Our motto has been, "Yesterday's supercomputer is today's laptop," Mr. Platt said during a lobbying trip last month. "There comes a moment when a technology is so widely available that the kind of limits that we put in place just a few years ago simply don't make any sense anymore," he said.

The regulation of computers and microprocessors has long been based on a rough measure of their speed: Millions of theoretical operations per second, or Mtops. As a benchmark, a fast version of Intel's Pentium III chip, the standard in many $2,000 personal computer systems sold today, is rated at about 1,300 Mtops. New versions of the chip, due out later this year, will exceed 2,000 Mtops -- which had been the threshold for some exports. The new chips may also be connected together in computers that will run at 12,000 Mtops or faster.

Virtually all computers can be shipped to America's closest allies -- Western Europe, Japan, Canada, Mexico, Australia and New Zealand -- regardless of speed. The White House said today that Hungary, Poland and the Czech Republic -- the new members of NATO -- and Brazil would be added to that list.

Tighter restrictions apply to a second group of countries, including most of South America, South Korea, South Africa and much of Southeast Asia. Under the old rules, companies needed to obtain individual export licenses to ship computers that run faster than 10,000 Mtops to those nations. But companies complained that as a result of the rule, they were losing sales of faster personal computers and bigger machines known as file servers that are commonly found in ordinary offices. Mr. Clinton's order today doubles the limit to 20,000 Mtops.

The main controversy surrounds the third category: nations considered "proliferation risks." They include China, Russia, Israel, Vietnam and most Middle Eastern countries.

Under the old rules companies had to get licenses to ship any computer faster than 2,000 Mtops to a military user, and faster than 7,000 Mtops for civilian users. But there is no way to assure that a fast personal computer sold to a civilian in China does not make its way to the military.

Mr. Clinton's proposal, subject to Congressional review, is to raise the limit for military users to 6,500 Mtops, and for civilian users to 12,300 Mtops. The latter figure was proposed by the computer industry, which fears that billions of dollars of sales to the Chinese market could be lost if the rules are not changed by year's end.

http://www.nytimes.com

LOAD-DATE: July 2, 1999