Obama Proposes Easing Export Controls on Technology Products for 37 Allies
U.S. President Barack Obama
Roger L. Wollenberg/Pool via Bloomberg
U.S. President Barack Obama.
U.S. President Barack Obama. Photographer: Roger L. Wollenberg/Pool via Bloomberg
U.S. export controls for technology items with military uses would be eased on sales to 37 allies, a change that President Barack Obama says will help meet his goal of doubling American exports.
The Commerce Department asked U.S. industry groups to review its proposal today to relax limits on sales to countries such as Germany, Japan and Canada for items such as aviation navigation systems, electronic components and common resins.
“The world wants products made in America, and we’ve got workers ready to make them,” Obama said today at a White House meeting of his export council, whose members include Boeing Co. Chief Executive Officer James McNerney, United Parcel Service Inc. CEO Scott Davis and Xerox Corp. CEO Ursula Burns. “At a time when jobs are in short supply, growing our export markets is an imperative.”
The U.S. requires exporters to obtain a license to sell civilian technology, such as aircraft parts and encryption software, that also can be used for military purposes. The restrictions vary based on U.S. relations with the government, and those rules are administered by the Commerce Department and State Department.
Commerce Secretary Gary Locke proposed eliminating export controls for sales to close allies a year ago, and has pushed to get the rules released, saying the changes will boost both U.S. exports and national security.
The changes proposed today are substantial, Davis told reporters after the council meeting. “We’ve seen areas where 75 percent of products that were controlled” will be open to export, he said.
Doubling Exports
The process to obtain such export licenses slows commerce and harms the competitiveness of American manufacturers, Locke said this week in an interview. Obama has made easing those rules part of his effort to double U.S. exports in five years.
Obama highlighted for the council trade initiatives his administration has undertaken, such as revising a free-trade agreement with South Korea that he said would support 70,000 jobs, and deals with India and Russia.
An administration official, who briefed reporters on the condition of anonymity last night, said putting the rules in place will take most of next year.
“Conceptually this is a very important move forward,” Catherine Robinson, the director for high-technology trade policy at the National Association of Manufacturers, a Washington-based industry trade group, said yesterday.
Military, Technology
Four export rules were published today for comment, including new regulations on the export of military vehicles, criteria for creating a tiered system to classify technology for export and lessening restrictions on exports to certain countries.
The proposed regulation would give companies the ability to export without a prior government license for sales of many items to 37 nations: Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.
A narrower category of items may be sold to 125 nations without approval by the government, according to the draft rule. Not included on either list was China. Its top leaders complain frequently that U.S. technology controls dampen American exports and exacerbate the bilateral trade deficit.
Military Vehicles
The State Department today separately published a proposal on how it controls the sale of military vehicles, a plan the administration is using as a template to guide how it plans to overhaul the system to regulate military items.
The proposals on changes to the State Department list and the overall effort may ease some of the restrictions on trade with China, according to Larry Christensen, a lawyer at Miller & Chevalier in Washington.
“Export controls have never had this level of attention before,” he said. “There is a significant chance for a much better system.”
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
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