Computer industry protests export delays Clinton plan was meant to cut licensing time

June 10, 1996|By JOURNAL OF COMMERCE

The computer industry is fuming over the latest signs that an export speedup policy ordered by President Clinton has actually doubled licensing times for many sales and allowed a greater role for its arch-enemy, the Arms Control and Disarmament Agency.

At issue is a Dec. 5 executive order that Clinton promised would cut maximum licensing times for high-tech exports by 25 percent, to 90 from 120 days. The streamlining was offered in exchange for giving security agencies the right to review all export applications to the Commerce Department.

No one disputes that the "balanced order" has cut decision times for some of the most sensitive exports. Under the order, agencies must now resolve cases through a dispute resolution process when differences arise over possible use of exported technology in foreign missile programs, for example.

The problem is that most routine high-tech exports used to be licensed in a fraction of the maximum time. The new mandatory referrals to security agencies have slowed many of these exports, although the extent depends on how the numbers are read. The industry's reaction shows the difficulty of balancing the demands of business and security.

William Reinsch, Commerce undersecretary for export administration, said a little more than half of all applications for individual validated licenses used to be referred to other agencies for clearance under the old system.

If Commerce kept the reviews in house, the average license took as little as 12 days. If other agencies got into the act, clearance averaged 41 days.

A rough average of the two would be 26 days. Under the new system, including Pentagon review of all licenses, the average approval time has been 24 days.

Reinsch sees that as a marginal improvement in the average, although he concedes it may be tough on those who used to get their approvals in 12 days.

Industry looks at the figures the other way, saying that nearly half of all licenses are taking twice as long to process.

"Those average figures have always been deceiving," said David Calabrese, government relations manager for the Electronic Industries Association.

Officials say a greater speedup is expected soon. Although the Defense Department is still reviewing all licenses under the new system, it will delegate some categories back to Commerce in the next two to three weeks so it can focus on specific technologies of greater concern, said Bryan Whitman, a Pentagon spokesman.

But so far, it is unclear whether Commerce will regain exclusive control over any items.

Industry groups are incensed over a Commerce briefing paper obtained last week, which shows that the Arms Control and Disarmament Agency, an autonomous anti-proliferation watchdog within the State Department, has taken jurisdiction over "all computer cases to all destinations."

The controversial ACDA has been a prime target for both exporters and Congress. Last year, Sen. Jesse Helms, the North Carolina Republican who chairs the Foreign Relations Committee, tried to abolish it in a State Department reorganization that the president vetoed. Industry groups are bitter that ACDA has not only survived but has laid claim to all computer licensing.

"Here we go. Just what we were afraid of -- an agency in search of a mission," said Greg Garcia, director of international trade affairs for the American Electronics Association. "They were on the brink of extinction. Now, they're back in full regalia, reviewing licenses."

The long-running battle between high-tech exporters and ACDA is one that has generally escaped the public, which tends to view anti-proliferation advocates as the "good guys."

In the past, exporters have often referred to ACDA officials as "Neanderthals" who believe that computers represent a "choke-point" technology for advanced weapons development.

Joseph Smaldone, an ACDA spokesman, said he understands the hostility because the agency has generally been "in the conservative quarter with regard to controls." But he insists that ACDA has not used the president's order to expand its role.

Here again, the arguments on both sides are a matter of interpretation. Although ACDA is reviewing all individual validated licenses for computer exports, the administration has decontrolled computers that are between 160 and 800 times faster than those sold under general license in 1993.

The result is that ACDA is monitoring fewer sales than before. But exporters, who won a fourfold increase in decontrolled computer speeds last October, are annoyed that the new order announced two months later has dragged them back before ACDA.

Garcia said the problem is that available computer speed doubles every 18 months. And unless controls are eased continually, the new review process will become a prescription for delay, allowing foreign competitors with less bureaucracy to clinch sales.

Pub Date: 6/10/96

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