Washington, DC – National Foreign Trade Council (NFTC) President and USA*Engage Co-Chair Bill Reinsch today released the following statement in response to the Senate Finance Committee’s approval of the Iran Sanctions Act of 2008.

“While the Iran bill passed in committee today is an improvement over previous iterations, it still raises a number of concerns with regard to U.S. foreign relations and diplomacy.

“Of particular concern is a provision which would prevent the United States from entering into the U.S.-Russia Nuclear Cooperation Agreement. The Bush administration’s decision to negotiate a Section 123 Agreement with Russia was reached based on the fact that Russia has already taken important steps to prevent Iranian nuclear proliferation.

“We believe that the United States must certainly seek greater Russian cooperation on Iran, but this bill is exactly the wrong way to achieve that cooperation. The bill is more likely to undermine U.S. multilateral efforts to stop Iran from developing nuclear weapons for which Russia’s cooperation is indispensable. Jamming a finger in Russia’s eye is only likely to weaken its willingness to cooperate with the United States. We applaud Senator Bingaman’s efforts to protect this agreement.

“While Iran’s behavior is unacceptable, Congress must balance the need to stand strong against the risk of doing something counterproductive like this bill.

“We thank Senators Baucus and Grassley and their staffs for their hard work and leadership in attempting to limit the impact of this legislation on the president’s ability to conduct foreign policy.”

As Reinsch noted during his April 8 testimony on S.970, a similar bill before the Senate Finance Committee, a better approach would be to fund a high-level special envoy for Iran with the authority to engage in direct bilateral talks in partnership with the international community. As he noted then, “The United States has made some progress negotiating an end to North Korea’s nuclear weapons program through direct diplomatic engagement. When it comes to Iran, there is already a framework for cooperation – security talks in Baghdad – and precedent – the United States and Iran cooperated in the past to support democratic governance in Afghanistan.”

Reinsch cautioned at the time, “I will guarantee you that if S. 970 is enacted it will have serious unintended consequences which will be manifested rather quickly, and which would make our efforts to change Iran’s behavior significantly more difficult. I strongly urge the Committee to reject this approach and instead to endorse diplomatic efforts with our allies and with Iran that are much more likely to result in a positive outcome.”

This week the NFTC will lead a press roundtable to discuss S.970 and the Section 123 Agreement. For more information, please use the contact information listed above.

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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.

Washington, DC – National Foreign Trade Council (NFTC) President Bill Reinsch spoke today to the American Conference Institute’s 11th National Forum on Export Controls, during which he discussed the future of U.S. export controls and outlined a set of recommendations to substantially reform the system.

To provide perspective on the current system, Reinsch stated, “Export controls are not a new concept. In the beginning, control policy was easy. We knew who the enemy was and where he was, and there was an allied consensus on what to do about him…. Now it is different. Adversaries are diffuse and are not always even states. While there is a degree of allied agreement on rogue states, most of the tough decisions relate to gray area states like China and India that are neither close friend nor determined foe and which are significant economic entities.”

Reinsch noted that current proposals to deal with this new reality, “aim at real problems but in the wrong way,” and argued, “there are essentially three approaches to export control reform. The first is tweaking the current system – applying duct tape and wire to keep it operating… The second is to eliminate interagency squabbles by creating a unitary, independent agency to administer both dual use and weapons programs. This approach would abolish completely the current authorities in Defense, State, and Commerce and create a new independent office reporting directly to the President and the National Security Council.”

He pointed out that although this second approach is well-intentioned, it “cannot be enacted as proposed. At some point during Congressional consideration of such a bill, the Secretaries of State, Defense, and Commerce would each approach their authorizing committee chairmen and argue that while they could live with an independent agency, there is a small set of licensing decisions that require their direct involvement…. and in five years the system will look very much like it does now but with an extra layer of bureaucracy.”

Noting the weaknesses of those options, Reinsch recommended a third approach – “a unitary system that operates within an interagency framework. The distinction between military and dual use items would be abolished – all would be subject to the same procedure, thus eliminating the commodity jurisdiction issue that has plagued the current system while still ensuring that all relevant parties are able to participate in the process. Since weapons and dual use items are subject to different multilateral obligations, the distinction between them cannot be abolished, but processing them the same way would be a significant simplification…[Further], by building in innovations like project licenses and the identification of trusted end users and implementing a robust list review program, we could reduce the volume of applications that are routinely approved and increase efficiency.”

In conclusion, Reinsch stated, “This is clearly not a debate we are going to have this year, but the arrival of a new administration next year creates an opportunity for long overdue reform. Past efforts have foundered on politics and legitimate deeply held differences of view, but the law is so out of date and the process so creaky that even Congress is becoming embarrassed. I plan to spend a good part of my time trying to promote change, and I hope you will too.”

To read the full remarks, please visit http://www.nftc.org/default/export%20controls/Reinsch%20Speech%20Export%20Controls.pdf

Washington, DC – The National Foreign Trade Council (NFTC) and USA*Engage joined four other leading associations in sending letters late yesterday to U.S. Secretary of State Condoleezza Rice, Secretary of Commerce Carlos Gutierrez, and Attorney General Michael Mukasey, urging the Administration to take specific steps to help ensure that members of the Organisation for Economic Co-operation and Development (OECD) are adequately enforcing the OECD Anti-Bribery Convention.  In addition to NFTC and USA*Engage, the American Society of Civil Engineers, the National Association of Manufacturers, Transparency International-USA and the United States Council for International Business signed the letter.
 
“This landmark agreement is important because it imposes a foreign bribery prohibition on competitors from most of the major industrialized nations simultaneously.  Unless there is consistent enforcement, contracts may go to competitors from countries with weaker enforcement records, and efforts to bring China and India under similar foreign bribery constraints will be undermined,” wrote the associations in the letter.

“The United States has been the driving force behind the OECD Convention, but, if it is not fully enforced, transnational bribery will continue to undermine fair competition, penalizing U.S. companies that operate with integrity.  It will also undermine effective use of resources, investment and economic development, the rule of law and democracy as well as energy security and national security,” the letter continued.

The associations outlined six recommended steps the Administration should take to make certain that OECD member nations are fulfilling their obligations with respect to the Convention. Noting, “foreign bribery will only abate if there is a credible threat of enforcement and dissuasive sanctions in all major exporting nations,” the groups strongly recommended that the United States urge the United Kingdom to “enact during the 2008 parliamentary session a foreign bribery law fully compliant with its Convention obligations.” They also recommended that the Administration call for a G-8 report “detailing each Party’s progress on OECD Convention enforcement and encourage those which have not brought cases to do so,” in addition to calling for an OECD annual report “listing all foreign bribery prosecutions, including convictions and other dispositions.” 

The groups called on the Administration to support accession to the Convention by China, India and Russia, to insist on high-level participation in the OECD Working Group, to urge the OECD Working Group to “reaffirm Article 5 of the Convention subject only to a narrowly drawn and reviewable exception based on the ‘necessity doctrine’ as recognized under international law.”

“We believe that the OECD Ministerial Meeting on June 4-5, 2008, is a crucial opportunity to elevate attention and pressure on all OECD members to fulfill their commitments, and we urge the United States to take the lead in this effort,” the associations concluded.

To read the full letters, please visit www.usaengage.org.