- The Washington Times - Wednesday, January 27, 2010

Senior Obama administration national security and trade officials will meet Wednesday with key congressional leaders to seek support for a major overhaul of U.S. export controls, aimed at loosening the restrictions with an eye to economic gains.

The breakfast meeting with Defense Secretary Robert M. Gates and White House National Security Adviser James L. Jones will include Brent Scowcroft, a former national security adviser who led a recent government-sponsored study that called for ending Cold War-era national security controls on U.S. exports of defense and civilian-military, dual-use technology and products.

The administration officials will argue for reforms, asserting that streamlining defense trade controls will fix a broken system and improve U.S. economic competitiveness. Trade security officials and specialists fear that loosening defense trade controls will bolster the arsenals of China, Iran and other states.

The administration officials, including Commerce Secretary Gary F. Locke and Ellen O. Tauscher, undersecretary of state for international security, will meet with senior House and Senate leaders as well as the chairmen and ranking members of the House and Senate foreign affairs, armed services and banking committees to discuss the Obama administration’s plan for revamping the trade controls.

According to congressional and administration officials, the administration’s new plan is drawn from the 2009 study by a panel of experts under the direction of Mr. Scowcroft. The study, which was done for the National Research Council, an arm of the National Academy of Sciences, initially had Mr. Gates as the panel leader before he moved to the Pentagon in 2006.

The 1979 Export Administration Act, which must be extended annually by the president, is the current law on export controls and will be the focus of reforms, the officials said. A new, more business-friendly law will be sought by the administration, said the officials close to the issue who spoke on the condition of anonymity.

A White House spokesman had no immediate comment, but Pentagon spokesman Geoff Morrell said the Defense Department had no plans to play its customary role of blocking new export-control rules, wanting instead to start at Year Zero and develop a whole new regulatory regime.

“The Defense Department has traditionally been an impediment to meaningful changes in our export controls, but Secretary Gates is committed to working with the White House, State, Commerce and the Congress to make wholesale changes to the rules and regulations governing technology exports,” he said. “Tinkering with our antiquated, bureaucratic, overly cumbersome system is not enough to maintain our competitiveness in the global economy and also help our friends and allies buy the equipment they need to contribute to global security.”

He said Mr. Gates “strongly supports the administration’s effort to completely reform our export-control regime, starting ideally with a blank sheet of paper.”

Another expected policy change to be discussed at the meeting is to move some authority for issuing export licenses from the State Department to the Pentagon, raising concerns that the office in charge of weapons procurement from defense contractors will be influenced by the business community when making decisions on sensitive exports.

Currently, controls over defense and military exports are spread out among several agencies, mainly at the Commerce and State departments with review by the Pentagon.

The members-only breakfast was organized by the State Department and is designed to get the lawmakers’ views on the reforms.

The proposed reforms come as theft and illegal purchases of defense technology are increasing. According to Immigration and Customs Enforcement (ICE) statistics, in fiscal years 2007 and 2008, ICE conducted more than 2,350 criminal investigations involving weapons-law or technology-transfer violations, many of which led to arrests and convictions for illegal exports or attempted exports to China, Iran, Russia and other countries.

Mr. Scowcroft declined to comment on the upcoming Capitol Hill meeting, but said in an interview that his study on export controls highlights current problems.

“We’re not saying we ought to abandon controls,” he said, noting that defense items that need to be protected should be “controlled and controlled vigorously.”

“But now, the general philosophy is, control everything and let a few things out,” Mr. Scowcroft said. “We need to control the things that need to be controlled” and let other goods be sold.

Mr. Scowcroft, a retired general, worked in the White House for President George H.W. Bush. He is currently head of the Scowcroft Group, which has extensive business dealings in China.

The administration’s plan to adopt some of Mr. Scowcroft’s export-control study was noted by Secretary of State Hillary Rodham Clinton, who said in a speech Oct. 16 that “we look forward to drawing on his ideas emanating from a study that he has just chaired on this important issue.”

The White House also announced in August that ir was reviewing export controls for both dual-use and defense trade.

“The U.S. has one of the most robust export-control systems in the world,” a White House statement said then. “But it is rooted in the Cold War era of over 50 years ago and must be updated to address the threats we face today and the changing economic and technological landscape.”

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, said he is concerned the new policy will be skewed toward promoting business at the expense of U.S. national security.

“This new policy is a giant push by industry to export technology that was developed by taxpayer dollars for defense purposes,” Mr. Milhollin said. “This also appears to include a push to decontrol manufacturing technology for defense items, which if carried out, will send high-tech defense jobs overseas.”

He added: “If industry gets its way, and we drop controls on dual-use technology, then [other countries] will do the same. It will be impossible to keep dangerous items out of the hands of the Iranians and the Chinese.”

Edward Timperlake, a former Pentagon technology-security specialist, said there is broad agreement that export controls need reform, but warned that the national-security risks are proven by the aggressive efforts foreign spies make to steal or illegally acquire U.S. defense technology. These efforts could be made redundant and U.S. counterintelligence pointless if the goods become freely available.

“The counterintelligence challenge has been to stop military technology from falling into the hands of Chinese intelligence agents,” Mr. Timperlake said. “And now it is possible that the effort could be undermined by a new policy that puts the entire program in doubt.”

The Scowcroft report, “Beyond ‘Fortress America’: National Security Controls on Science and Technology in a Globalized World,” stated that current export controls “now quietly undermine our national security and our national economic well-being.”

“The entire system of export controls needs to be restructured, and the visa controls on credentialed foreign scientists and engineers should be further streamlined to serve the nation’s current economic and security challenges,” the report said.

The report said the export-control system is “fundamentally broken” and will not be fixed with piecemeal changes without direction from the president.

According to the report, for some 20 years, the administration and Congress could not agree on how to control dual-use exports, the report said. The failure has “led to unnecessary vulnerabilities in our national security and in our economic competitiveness.”

The report also said the current “list-based systems” of protecting sensitive exports is difficult to administer and too restrictive because of “global developments in science and technology.”

The report was produced by a blue-ribbon panel of academic and business leaders and said efforts to block dangerous technology and scientific know-how from those seeking weapons of mass destruction or advanced military systems should be maintained, but changed.

“Our former unilateral strategy of containment and isolation of our adversaries is, under current conditions, a self-destructive strategy for obsolescence and declining economic competitiveness,” the report said.

The panel recommended eliminating export controls on dual-use goods for items available on the international market, and setting up two units to streamline export licensing and appeals.

• Bill Gertz can be reached at bgertz@washingtontimes.com.

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