Timing May Hurt U.S. Export-Control Proposals

New draft regulations appear poised to do what past presidents and Congresses could not or would not: make it easier for U.S. weapons makers and defense firms to sell military items abroad. But advocates say political pressure from Congress could still stifle the proposed reforms.

Released Dec. 9 by the White House, the proposed rules would ease export license requirements for many weapons and parts and establish processes to allow federal officials to transfer items from the State Department’s U.S. Munitions List to the Commerce Control List, overseen by the Commerce Department.
The timing of the proposals may dim their prospects, observers said. “Implementing them will be a bigger challenge next year than it would have been the last two years,” said Joel Johnson, executive director-international for the Teal Group.

The departure of Jim Jones, Obama’s former national security adviser, and the expected exit of Defense Secretary Robert Gates could also hurt the reforms, export control experts said. The two have spearheaded the effort.
Another reason is the coming shift atop the House Committee on Foreign Affairs: Rep. Ileana Ros-Lehtinen, a hardliner Republican from Florida, will take over for Rep. Howard Berman, D-Calif.

“Ros-Lehtinen is going to be less amenable to reform than Howard Berman,” Johnson said. After the White House announced its proposed changes, Berman urged new Republican leaders to approve them. “The modernization of our export control systems is essential both to protect national security and foster U.S. technological leadership for U.S. economic growth,” Berman said in a Dec. 9 statement.

One former export control official said there will be a lot of new Congress members in January, and many may have yet to do much thinking about the issue. “There might need to be some missionary work done” by the president or other advocates, he said. And one congressional source said that while the issue has been politically tough in the past, there is a consensus now that the system needs improvement.

Two Lists

The White House fact sheet said the new rules are intended to establish a “bright line” between the lists run by the State and Commerce departments, to “end jurisdictional disputes and ambiguities that hinder our current system.” It called the Munitions List, in particular, too open-ended, subjective and broad. “Rebuilding the two U.S. export control lists — which currently have different structures, take different approaches to defining controlled products and are administered by two different departments — is the cornerstone of the reform effort because all other aspects of our system are contingent upon what we control,” the fact sheet said.

The rules may potentially allow the creation of a single master list of controlled items, the fact sheet said. The White House said these new “transparent rules … will reduce the uncertainty faced by our allies, U.S. industry and its foreign partners, and will allow the government to erect higher walls around the most sensitive items in order to enhance national security.” For example, a U.S. fighter jet loaded with highly sensitive components would be treated differently than a bolt or lug nut, said Remy Nathan, assistant vice president for international affairs at the Aerospace Industries Association.

In the military vehicles category alone, the administration said, 74 percent of the items from the State Department’s list could move to the Commerce Department, allowing State officials to scrutinize the remaining, more sensitive items. To make changes to the U.S. Munitions List, the administration must notify Congress and wait 30 days. Lawmakers may pass legislation to stop the changes, but have rarely done so. “In the past, political heat has been enough to cause it to flop,” the former export control official said. “They can make you really sorry that you did it.” Meanwhile, the Commerce Department rolled out a proposed regulation of its own. The rule would create a license exception to allow exports of controlled items “to countries that are members of all four multilateral export control regimes or other regime members that also are members of NATO,” the fact sheet said. It also would allow exports of some items “to countries that are members of or adherents to all four multilateral export control regimes, members of NATO, or for civil end-uses in destinations that have not historically represented a significant diversion or proliferation risk for U.S.-origin items,” the fact sheet said.

As well, the department is seeking public input about items on its control list.

Three Tiers

The draft regulations describe the criteria and procedures that will “distinguish the types of [dual-use] items that should be subject to stricter or more permissive levels of control,” a White House fact sheet said.
Dual-use items will be assigned to one of three tiers, allowing scrutiny to be focused on more sensitive technologies:

• The top tier would contain critical military and intelligence technology that belongs exclusively or nearly so to the United States, and for which a license will almost always be needed for export.
• The second would include items that “provide a substantial military or intelligence advantage to the United States,” but can be bought from U.S. firms and those of Washington’s allies, and whose exports would be cleared to U.S. allies under license exemptions.
• The third is for technology that is widely available; a license would be needed for “some, but not all, destinations,” the fact sheet said.

Experts say the general idea is to make it easier for companies to export items in the bottom two tiers. Reaction last week from U.S. defense companies was mostly upbeat, reflecting industry desires to look abroad for sales as the growth in Pentagon spending cools. “We welcome the administration’s continued interest and attention on streamlining and strengthening the U.S. export control process,” Jim Albaugh, president and CEO of Boeing Commercial Airplanes and chairman of the Aerospace Industries Association, said in a statement released by the AIA.

But Teal Group’s Johnson said the devil is in the details.

The draft regulation says even items no longer needing export licenses will see “new limitations imposed on the re-export of those items to prevent their diversion to unauthorized destinations.” Also, Johnson said, “When you start moving low-tech stuff to commerce, you’re going to have to somehow deal with the issue that there are Munitions List categories or items that are low-tech, but highly emotional, for lack of a better word.” He said political and foreign policy implications will still limit where the United States wants some low-tech and even widely available weapons to go.

“The administration is going to have to make the case for removing some things” from the Munitions List and shifting them to a less-restrictive export clearance process,” said AIA’s Nathan.

The former export control official said that while reform is necessary, today’s geopolitical landscape actually calls for tighter arms export controls. The Soviet Union wanted the United States’ technologies, but did not need them; whereas places like North Korea and Iran need what the United States has, he said.

By John T. Bennett and Kate Brannen