High-tech export rules challenged

At the prompting of Boeing, General Electric and other member companies, the National Association of Manufacturers (NAM) and other trade groups in March will launch a lobbying campaign aimed at changing rules on high-tech exports that are controlled for national-security purposes.

NAM plans to submit joint regulatory reform proposals to the administration on March 12 in cooperation with several other groups, including the U.S. Chamber of Commerce, the Aerospace Industries Association (AIA) and the Electronic Industries Alliance (EIA).
AIA and EIA are veterans in the export-control fight, but NAM, a broader organization representing U.S. manufacturers, is re-entering the debate after a hiatus that began in the mid-1990s, business sources said.

The involvement of top officials such as NAM President John Engler and Chamber President Tom Donohue reflects rising frustration among U.S. companies with U.S. export-control systems, according to the president of the Coalition for Employment Through Exports, Ed Rice.

“What’s striking to me about this new effort is it has drawn the attention of the top leaders of these groups,” Rice, a veteran of export-control debates, said. “I think this increases the chances that some meaningful changes could be made,” he said, adding that Washington trade associations are clearly responding to complaints from their members.

“If we’re going to be successful, the more the better,” AIA’s vice president of defense and international affairs, Mark Esper, said. Esper, formerly an aide to retired Senate Majority Leader Bill Frist (R-Tenn.), said the key to success is to build a broad base of support, and promised the coalition would grow to include other groups.

The new coalition will offer regulatory reform proposals to the administration and will not press for legislation, according to NAM’s vice president for international economic affairs, Frank Vargo. However, the trade associations are hoping to cooperate with a new congressional working group on export controls to be headed up by Reps. Don Manzullo (R-Ill.), Earl BlumenauerEarl BlumenauerRussia, China eclipse US in hypersonic missiles, prompting fears Water has experienced a decade of bipartisan success Way to go, Ted Poe MORE (D-Ore.) and Joseph Crowley (D-N.Y.).

Moving legislation to ease export controls is seen widely as a steep uphill climb. The last time there was momentum for an export-controls bill was in 2001, when the Senate approved legislation a few days before the Sept. 11 terrorist attacks.

“The problem with coalitions on export controls is that the high point is when proposals are out, and then it’s all downhill from there,” one lobbyist who was part of the 2001-’02 fight said. He said reform proposals sponsored by business are slowly watered down.

Rice noted that the Bush administration is in its seventh year, and already has a full plate of arguable crises. In that environment, “it’s not easy to get people’s attention, or to carry out a policy-making process to make changes,” said Rice, who noted several vacancies in key Defense and State department positions that deal with export controls.

The new proposals will be aimed at reforming a system that too often costs U.S. companies foreign sales to counterparts in Europe and Japan, according to NAM’s Catherine Robinson, a former Ways and Means aide to Rep. Bill Thomas (R-Calif.) hired to head up NAM’s campaign.

For example, she said, current rules sometimes require a lengthy process to get a license to export products that pose little if any national-security risk. For example, some planes are designated as military instead of civilian simply because of the inclusion of certain nuts and bolts. “Foreign companies won’t buy the U.S. product because they don’t want to get caught up in the hassle,” Robinson said.

Another problem identified by Esper is the lack of a senior official coordinating U.S. export-control policy. That’s why AIA recommends that the administration designate a senior director within the National Security Council who would be charged with export controls.

Vargo said the key will be to get the Department of State to move on export controls. He described discussions with Commerce and the Department of Defense, which also oversee U.S. export controls, as more positive than discussions with State officials, particularly at the lower level.

Esper said the first challenge is to get administration officials who are focused on the big security issues of Iraq, Iran and North Korea to think about export controls. “Getting the top-down political push will be important,” he said.