White House: Export reform doesn’t require Congress to be enacted

The Obama administration could enact nearly all of its proposed export-control changes without shepherding legislation through Congress, a White House official said Monday.

The administration has crafted a draft version of legislation that would implement some of its desired export reforms, according to Michael FromanMichael FromanUS will investigate aluminum imports as national security hazard Overnight Finance: WH floats Mexican import tax | Exporters move to back GOP tax proposal | Dems rip Trump adviser's Goldman Sachs payout Froman heads to Council on Foreign Relations MORE, deputy national security adviser for international economic affairs. 

But White House officials also have concluded that around 80 percent of their export-control proposals could be enacted via “executive authority,” Froman said.

The reform push is part of a broader effort by President Obama to double U.S. exports over five years. Big businesses and the defense industry are onboard, with the latter eager to sell widely available technologies to close U.S. allies without dealing with the red tape and delays of the current system

Froman did not specify how much of the administration’s reform package might be enacted without legislation. But he and other export-control experts, speaking at a forum sponsored by the Hudson Institute, said Congress would likely erect some hurdles.

William Schneider, who was undersecretary of State during the Reagan administration, said congressional committees — especially the House Foreign Relations Committee — would try to block any reforms that reduced their sway over export decisions.

Without first obtaining “congressional buy-in” about reforms, changes likely will fall short “of the results we need,” Schneider warned.

Froman said he doubts the administration’s legislation would be acted on by Congress until this time next year.

“There are a few things going on in Congress right now,” Froman quipped.

White House officials plan to reach out to Congress to iron out differences between their draft bill and other export-control reform bills, he said. 

One issue is that the bills in Congress would take the White House’s idea to create a single export-control enforcement agency “in two totally different directions,” according to Froman.

Rep. Howard Berman (D-Calif.), ranking member of the House Foreign Affairs Committee, introduced one of the reform bills in May. Rep. Ileana Ros-Lehtinen (R-Fla.), the Foreign Affairs chairwoman, is reportedly writing the other.

One congressional source said lawmakers would welcome a White House move to enact most of the proposals.

“There has been a very consistent message from all the committees to the White House to proceed under current authority,” the source said. 

While there are “individual points” where members disagree with what the White House envisions, “the expectation up here is that they have the authority to move forward — with appropriate consultation, of course,” the source said.

Industry feels the proposed Obama administration changes would bring “clarity” to what is a military item and what is a commercial item, said Remy Nathan, vice president of international affairs at the Aerospace Industries Association.

Still, industry wants reform to be carried out in a way that shields American firms from liability issues, Nathan said.

“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,” according to a White House fact sheet released late last year.

Under the Obama administration’s reform push, federal agencies have crafted guidelines intended to assist officials with determining what kinds of items should be scrutinized and controlled.

The agencies fashion other rules to help guide when a company must obtain a license to export an item or system.

The White House contends that its proposed reforms 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,” according to its fact sheet.

Administrations have been taking whacks at the export-control reform piñata for nearly 20 years. The Reagan, George H.W. Bush, Bill ClintonBill ClintonAll five living former presidents to attend hurricane relief concert The Hill's 12:30 Report The Hill's 12:30 Report MORE and George W. Bush administrations all struck out.

The George W. Bush administration made three unsuccessful attempts at making export-control changes, said Brandt Pasco, who was a special assistant at the Pentagon from 2001 to 2005. He also has done work for the Obama administration at the Department of Homeland Security.

The Obama administration has taken the slippery baton, and even veterans of Republican administrations give it high marks for finally getting something done.

Last December, the White House unveiled details of its reform package. In a major development, it proposed setting up a “bright line” between the export-control lists run by the Commerce and State departments.

The idea there was to define clearly which items would be put under which list.

In a major proposed change, the administration intends to transform the U.S. Munitions List (USML). It is now run by the State Department; the White House wants to make it less “open-ended,” “subjective” and “broad,” according to the fact sheet.

The White House also unveiled a draft rule that defines the process it is proposing to use to decide whether a specific system or component should be subject to export controls. 

One of the biggest proposed changes was the notion of implementing a three-tiered system, including one that would cover so-called “critical” military and intelligence items made by U.S. firms. A second level would include items that “provide a substantial military or intelligence advantage to the United States” but can be supplied by American firms and those native to U.S. allies. And a third group is for technology that is widely available and likely will not require a license.

For the first grouping, obtaining a license would always be required prior to selling an item. For the second category, most exports to close U.S. allies would be approved via special exemptions. And for items placed in category three, a license often would not be required.