House Drafting Bill on Computer Export Policy

WASHINGTON (03/22/2000) - A bill being drafted in the U.S. House of Representatives could answer complaints from IT industry officials about what they claim are outdated rules governing foreign sales of U.S. computer hardware and software.

The drafters of the bill say there appears to be support in the House for a new approach to export controls that streamlines the process for certain IT products to U.S. allies and to countries such as China and Russia.

"We're looking at those specific industries in specific areas where we know that there is support and there are very clearly defined lines," said a staff member of the House Committee on International Relations' Subcommittee on International Economic Policy and Trade. "Information technology products are part of the one area where we see clearly defined lines and clear consensus on the need to streamline the process."

Other technology exports that have clear military purposes and exports to countries such as Libya and Iraq would not be included in the proposed measure, said the staffer, who asked not to be identified. The U.S. export control system is designed to ensure that certain technologies don't fall into the hands of U.S. adversaries.

The language now being drafted in the bill is likely to address only some of the concerns of the IT industry, specifically the six months companies currently must wait before new export control thresholds for computer equipment become effective, and tougher penalties. A bill could be ready for introduction within a few weeks.

Some members of the subcommittee, who held a hearing today on the reauthorization of the Export Administration Act, said they support reform of the export regime because foreign sales of U.S. IT products is a vibrant business for many U.S. computer products companies.

But other subcommittee members said they were disappointed in U.S. technology companies who are suspected of transferring technology developed in the United States to countries that are potential enemies.

"I'm aghast at what American corporations have done in terms of trading American technology," said Dana Rohrabacher, a Republican from California.

But technology industry officials say the current export regime should be altered at least to make it more accurately reflect current U.S. foreign policy and current U.S. national security policy, both of which have changed dramatically since the end of the Cold War.

Dan Hoydysh, director of Unisys Corp.'s Washington office and co-chairman of the Information Technology Information Council's (ITI's) Computer Coalition for Responsible Exports, told the subcommittee that the coalition supports a Senate bill to reauthorize the Export Administration Act.

"We feel that the export control system needs to balanced in such a way that we can compete effectively in the global marketplace while still protecting our national security," Hoydysh said. "We would never do anything consciously that would hurt or damage the security of this country. Everything that we are proposing we feel is in the best interest of the United States."

The six-month waiting period is so long for technology exports that it is impossible for the computer export controls to keep pace with market realities, Hoydysh said. For example, Apple Computer Inc., had to wait until January to begin exporting computers equipped with G4 processors to more than 50 countries, though the export control threshold that affected those computers had been raised in July of last year.

Hoydysh also said foreign computer companies are in a position to take advantage of markets closed to U.S. computer companies while they wait out the six months period.

The original Export Administration Act expired in 1994, and since then U.S.

President Bill Clinton has continued export controls by issuing executive orders.

The ITI, in Washington, can be reached at +1-202-737-8888 or found on the Web at http://www.itic.org/.

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