“Catch All” Provision in New Rule Would Undercut Multilateral Export Controls
on Duel-Use Technologies

Washington DC – The National Foreign Trade Council (NFTC) and USA Engage joined 21 other leading U.S. business organizations calling on the Bush Administration to reconsider moving forward with new export control regulations. At issue is a proposed rule to impose additional licensing requirements and controls on the export of U.S.-origin dual-use items and technology to some 19 countries, including China.

In a letter to top Administration officials, the business groups pointed out that existing mechanisms already allow the U.S. to control the transfer of all militarily-significant items to the countries in question. “Adding a ‘catch-all’ control would not contribute to U.S. security,” the groups stated. “Given the widespread availability of most dual-use items and technologies, unilateral U.S. restrictions would only widen the disparity between U.S. export controls and those of other governments, including our closest allies, undercutting the goal of multilateral cooperation,” the letter continued.

The letter was sent to National Security Advisor Stephen Hadley, U.S. Commerce Secretary Carlos Gutierrez, U.S. Trade Representative Robert Portman, U.S. Secretary of State Condoleezza Rice, and U.S. Defense Secretary Donald Rumsfeld.

“The framework already exists for adequate control of duel-use products. A unilateral attempt by the United States to broaden the scope of these controls is counterproductive and will only hurt U.S. interests,” said NFTC President Bill Reinsch, who also serves as Co-Chairman of USA Engage.

If the Administration pursues the new rule, the business groups outlined four principles that they believe must be followed:

1. Any new U.S. licensing and export controls should be consistent with those promulgated and implemented by other Wassenaar Arrangement member governments.
2. The scope of any new U.S. licensing and controls should be limited to those items and technologies that the government has informed exporters would directly and significantly contribute to new military capabilities.
3. All items that are to be subject to new licensing and controls must be explicitly identified and listed.
4. The foreign entities that are the target of any new licensing and controls must be explicitly identified.

A copy of the letter is available at http://www.nftc.org/default/deemed%20export/BIS%20Catch-all%20Ltr%20Hadley%209-21-5.pdf.

 

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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.

USA*Engage (www.usaengage.org) is a broad-based coalition representing Americans from all regions, sectors and segments of our society concerned about the proliferation of unilateral economic sanctions at the federal, state, and local level. Established in 1997, 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. USA*Engage promotes responsible alternatives to unilateral sanctions that advance U.S. humanitarian and foreign policy goals, such as intensified U.S. diplomacy and multilateral cooperation.

 

Washington DC – The National Foreign Trade Council (NFTC) announced today that Jake Colvin has joined the organization as the new director of USA*Engage.  In his role, Colvin will oversee the advocacy efforts of USA*Engage – a coalition formed to promote alternatives to the use of costly and ineffective unilateral economic sanctions by the United States. He will also contribute to NFTC’s efforts to reform U.S. visa policy and export controls.

“The mission of USA Engage continues to be of vital importance to U.S. competitiveness. Jake Colvin’s extensive experience on the international front will be a great asset as we move forward,” said Bill Reinsch, President of the National Foreign Trade Council and Co-Chair of USA*Engage.

Prior to joining the NFTC and USA Engage, Colvin was a consultant with the Washington, DC-based firm International Business Counselors (IBC), where he advised U.S. and foreign corporate clients on economic and trade matters. His prior experience also includes work on trade remedy, business immigration and refugee issues at the law firm of Steptoe & Johnson, as well as positions with the U.S. Embassy in Chile, the Atlantic Council of the United States and the Congressional Helsinki Commission.

Colvin has appeared on nationally-syndicated talk radio programs and has written for national publications on a variety of international economic and tax topics. Originally from Long Island, New York, he earned an M.A. in International Economics from the Johns Hopkins School for Advanced International Studies and a B.A. from the University of Richmond.  

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USA*Engage (www.usaengage.org) is a broad-based coalition representing Americans from all regions, sectors and segments of our society concerned about the proliferation of unilateral economic sanctions at the federal, state, and local level.  Established in 1997, 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. USA*Engage promotes responsible alternatives to unilateral sanctions that advance U.S. humanitarian and foreign policy goals, such as intensified U.S. diplomacy and multilateral cooperation.

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 300 member companies through its offices in Washington and New York.

 

More than 100 Companies and Trade Associations File Comments In Opposition

WASHINGTON, DC – Led by the National Foreign Trade Council, more than 100 leading companies, trade associations and academic institutions submitted comments to the Department of Commerce in opposition to a proposal by its Inspector General that would significantly expand the “deemed export” license program to require licenses for employees based on their country of birth rather than their place of residence. NFTC member companies and other associations believe this proposal will have a negative impact on their ability to hire talented individuals and remain competitive in the global economy.

“The tremendous response demonstrates that the business community is unified in its opposition to this proposal. We believe that it will impose major additional costs on companies and accelerate the movement of our innovation base offshore. Accordingly, we urge the Department of Commerce to reject it immediately,” said NFTC President Bill Reinsch.

If the proposal were to come into force, it would likely require U.S. companies initially to ask all employees to provide information on their country of birth and then to file for additional export licenses, potentially costing companies hundreds of thousands of dollars and consuming valuable company resources.

“By expanding the program in this fashion, the Inspector General has put forth a proposal that will have little, if any, positive impact on U.S. national security,” added Reinsch.

At the deadline for submission of comments, NFTC estimated that more than 100 leading companies and trade associations filed comments in opposition to this proposal. A full list will be available on the Department of Commerce’s Bureau of Industry and Security website as early as next week. The comment period for the proposal closed on Monday, June 27.

 

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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.

Proposed Changes Could Hurt U.S. Competitiveness

WASHINGTON DC – In a speech to the Eighth National Forum on Export Controls, National Foreign Trade Council President Bill Reinsch outlined concerns over the proposed expansion of export controls by the Bush Administration and Members of Congress.  Specifically, Reinsch stated that changes in export control policy to combat terrorism are actually intended to expand controls on exports to China, potentially damaging the U.S. economy and over the long term, harming our security.

While recognizing that preventing potential terrorists from acquiring sensitive technology could require changes to the current U.S. export control regime, Reinsch urged caution on proposals aimed at restricting economic relations with China.

In his prepared remarks, Reinsch outlined the following negative consequences of expanded “deemed export” controls on China on the U.S. economy:

“The deemed export expansion…will simply put, drive the smart people away from [the United States] – the same smart people that have been the key to our economic success for the past 200 years.

“Companies will respond by putting their research labs and other facilities offshore, creating a reverse brain drain and ultimately not only transferring more technology offshore but setting up conditions to create it offshore

“[Expanded controls could] cripple transatlantic defense cooperation, retard NATO inter-operability and prompt the Europeans to put more money into their own defense R&D, costing us important sales in the future.”

Prior to serving as President of the NFTC, Reinsch was the Under Secretary for Export Administration at the U.S. Department of Commerce where he was responsible for developing and implementing policies for regulating the export of sensitive goods and technologies.

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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.

Proposed Changes Could Hurt U.S. Competitiveness

WASHINGTON DC – In a speech to the Eighth National Forum on Export Controls, National Foreign Trade Council President Bill Reinsch outlined concerns over the proposed expansion of export controls by the Bush Administration and Members of Congress. Specifically, Reinsch stated that changes in export control policy to combat terrorism are actually intended to expand controls on exports to China, potentially damaging the U.S. economy and over the long term, harming our security.

While recognizing that preventing potential terrorists from acquiring sensitive technology could require changes to the current U.S. export control regime, Reinsch urged caution on proposals aimed at restricting economic relations with China.

In his prepared remarks, Reinsch outlined the following negative consequences of expanded “deemed export” controls on China on the U.S. economy:

“The deemed export expansion…will simply put, drive the smart people away from [the United States] – the same smart people that have been the key to our economic success for the past 200 years.

“Companies will respond by putting their research labs and other facilities offshore, creating a reverse brain drain and ultimately not only transferring more technology offshore but setting up conditions to create it offshore.

“[Expanded controls could] cripple transatlantic defense cooperation, retard NATO inter-operability and prompt the Europeans to put more money into their own defense R&D, costing us important sales in the future.”

Prior to serving as President of the NFTC, Reinsch was the Under Secretary for Export Administration at the U.S. Department of Commerce where he was responsible for developing and implementing policies for regulating the export of sensitive goods and technologies.

 

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