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NFTC President Calls for Export Control Administration Reforms
Date: 4/24/2008


Reinsch Testifies That Reform is in the U.S. National Security and Economic Interests

Washington, DC – In testimony delivered today before a subcommittee of the Senate Committee on Homeland Security and Governmental Affairs, National Foreign Trade Council (NFTC) President and USA*Engage Co-Chair Bill Reinsch outlined key issues plaguing U.S. export control administration, including delay, uncertainty, repetitive licensing requirements and an outdated list of dual use items. In addition to outlining the problems, Reinsch also recommended specific reforms in the interests of U.S. national security and economic competitiveness.

“The fundamental characteristic of export control administration, whether dual use or weapons, is that both policy and specific licensing decisions inherently involve multiple equities.  Selling a controlled item is a foreign policy decision, a national security decision, a commercial decision, and often a nonproliferation and/or energy policy decision. Those equities are invested in different federal agencies, all of which deserve to be part of the process,” said Reinsch, a former Under Secretary of Commerce for Export Administration in the Clinton Administration.

“My experience has been that the government makes the best decisions when all relevant agencies are involved in the process, and each plays the role assigned to it as part of its mission. That, however, creates a cumbersome bureaucracy because it means the Departments of State, Defense, Commerce, and sometimes Energy, as well as various parts of the intelligence community, need to work together. The need to cooperate at both the technical and policy levels has been the weak point of this system for years,” Reinsch continued.

During his testimony, Reinsch outlined a number of export control administration problems, including “delay and uncertainty in decision making and, in the case of weapons, repetitive licensing requirements.  Applicants can face these problems initially if there is uncertainty or interagency disagreement over whether their proposed export is a dual use item or a weapon, and then subsequently in the licensing process itself.” Reinsch also pointed out that the dual use list is outdated and that “this, in turn, means more licenses are required in cases where our foreign competitors are not similarly constrained, resulting in loss of competitive advantage for American companies and no damage done to the end user, who simply buys a comparable European or Japanese product.”

While Reinsch endorsed the set of administrative changes to make licensing more efficient proposed by the Coalition on Security and Competitiveness, a group of prominent trade and industry organizations, of which the NFTC is a member, he argued that more fundamental reform is necessary and recommended “a unitary system that operates within an interagency framework,” which would mean combining State and Commerce control processes into a single system that retains the existing agency roles of the current dual use system.

In conclusion, Reinsch stated, “I have not in my comments addressed the question of resources.  That is not an oversight.  A plea for more resources is the standard response of every federal agency to every problem, and more money would no doubt be helpful, particularly after significant BIS budget cuts this year, but I do not believe it is the most critical issue…Adding money will not clear away the obstacles to efficient export control administration; it will simply allow more people to be inefficient.  I would encourage the Committee to address the fundamentals, however difficult that might be, rather than settle for with palliatives.”

To read the full testimony, please visit 
www.nftc.org/default/Press Release/2008/sCitigroupLatinAmerica 408 _2_.pdf

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USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.

The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.