James Jay Carafano: Export controls are an issue of good governance

“Trust but Verify.” President Reagan applied that mantra to more than just arms control.

In July 1979, it animated his criticism of President Carter for letting sensitive technologies slip into Soviet hands. Reagan quoted one of Carter's own Commerce officials as saying the administration's system of export controls — regulations designed to keep the bad guys from acquiring advanced technologies with military uses — was “a total shambles.”

Yet Reagan soon discovered that managing exports is no easy matter. In 1983, U.S. officials seized sophisticated American-made computers that his Commerce Department had licensed for export to South Africa. The South African company shipped them to West Germany. The next stop would have been somewhere behind the Iron Curtain.

Reagan responded by tightening export control regulations on high-tech computers. It drew an avalanche of complaints. Xerox said the regulations would cost it “1,000 jobs and between $25 million and $35 million a year.”

Over 250 other companies chimed in, forecasting costs totaling hundreds of millions of dollars and many thousands of jobs, as well as additional zeroes on the trade deficit. Within months, Reagan quietly dropped the proposal. 

It was not the last time Reagan struggled with getting export controls right. But he never stopped trying. Reagan recognized both the great danger of letting sensitive technologies fall into the hands of the Evil Empire and the great power of free trade to grow the U.S. economy. He also saw the value in working collaboratively with friendly nations to develop technologies for dual (civilian and military) uses.

While Reagan strove constantly to strike the right balance, other administrations have not tried as hard. Consequently, today's system of export controls does more to kill trade than to thwart the theft of defense secrets.

Some of the rules are truly silly. For example, exporters can ship parts for commercial vehicles most anywhere, but virtually identical parts used on military vehicles must go through a labyrinth of licensing review before the government will approve them for export. We're not talking about laser technology or tractor beams here. We're talking stuff like brake pads.

To his credit, President Obama has made a good faith effort to manage export controls in a way that is both pro-trade and pro-national security. He has proposed several major reforms that are reasonable, responsible and — at the end of the day — very practical.

First, Obama wants to have clear, consistent rules for how licensing requirements are established and managed. Second, he plans to establish an Export Enforcement Coordination Center to “coordinate and strengthen the U.S. government's enforcement efforts — and eliminate gaps and duplication — across all relevant departments and agencies.”

Third, he wants to create a common, government-wide information technology system to manage export controls.

These are all good, common sense steps. So, naturally, there will be folks in the agencies and on the Hill who will try to thwart them — protecting their own self-interests (be it regulatory “turf” or campaign contributors) rather than working to make the system work better for the national economy and the common defense. That's why past presidents have never had much success making sense out of export controls.

Let's hope the Obama administration, which has made a good start, will follow through and master a challenge that harried the “Gipper” even on his best days.

Examiner Columnist James Jay Carafano is a senior research fellow for national security at the Heritage Foundation.

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