22 April 1999
Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html

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[Congressional Record: April 20, 1999 (House)]
[Page H2142]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr20ap99-70]


                    AMERICA'S EXPORT CONTROL POLICY

  The SPEAKER pro tempore. Under the Speaker's announced policy of
January 19, 1999, the gentleman from Washington (Mr. Smith) is
recognized during morning hour debates for 5 minutes.
  Mr. SMITH of Washington. Mr. Speaker, I rise today to discuss our
Nation's export control policy. Obviously, economic growth is a key to
a prosperous future in this country, but that fact points out how
important exports are.
  When we look at the world right now, we have a unique situation
where, though the United States represents only 4 percent of the
world's population, we currently consume 20 percent of the world's
goods, services, and products.
  In other words, if we are going to have economic growth in the
country, we are going to have to open up foreign markets. We are going
to have to export, and take advantage of that 96 percent of the world's
population that does not reside in the United States.
  When we look at it once again, the recent trade deficit figures just
released today show another record trade deficit. There are a lot of
issues that contribute to that. Today I would like to talk about just a
couple that have to do with our export control policy, the policy of
the United States in limiting the number of goods and products that can
be exported from this country.
  These are limited in a couple of ways. One of them is through what
are called unilateral economic sanctions. That is basically where we as
a country decide we disapprove of some action of another country, and
then decide that we are not going to allow U.S. businesses to export to
them.
  I completely agree that we as a country need to stand up for things
like democratic freedoms, religious freedoms, economic freedoms in the
rest of the world, and do everything we can to encourage and promote
those, but policies of unilateral economic sanctions do not get us
there. Basically, all they do is force those countries to buy their
goods from some other place.
  The reason for this is the changing economy. As we have all heard, it
has become a cliche now, we live in a global economy. What that means
is if we attempt to impose our will on another country through
unilateral economic sanctions, we will fail. It will not work, because
that country can simply go to any one of the other members of this
global economy and purchase what they want. All we accomplish in that
situation is restricting our own companies' abilities to export.
  Multilateral economic sanctions make a certain amount of sense. If we
can get enough of our global partners together, as was in the case in
South Africa, as is the case in Iraq, to institute export control
policies so that it is not just us alone, the United States, then the
policies can work and can exercise some influence to make some changes,
as they did in South Africa.
  What I am opposed to is the proliferation of unilateral economic
sanctions that do not succeed in their stated goal and harm our
economy. There are several bills in Congress right now that will
attempt to change that policy. I am proud to be a cosponsor of the
House bill, and I think we need to move in that direction.
  I have brought a chart with me to illustrate the point. This chart
shows the number of countries in the world that currently have some
export controls on them; in other words, the number of countries which
U.S. businesses are somehow limited in their ability to export to. We
can see that it is a large number of countries, as they are represented
in red. They cover a substantial portion of the globe and a substantial
number of people; in other words, possible markets that we are losing
out on as a country.
  If we could change that policy and open up those markets, it could be
a boon to U.S. industry, and I must once again point out these policies
have not had much effect on changing the policies of the other
countries that we want to see changed.
  So unilateral economic sanctions have reached the point where they do
not work. All they are is bad for U.S. companies. If we want to expand
and grow, we are going to need access to these markets. We need to make
those changes to get there.
  There are a couple of other aspects of our export controls policy
right now that are particularly troubling because they focus on
technology. In other words, they focus on the highest-growing segment
of our economy, and indeed of the world's economy. They are controls on
encryption software and on computers.
  Basically, the U.S. has a policy right now that basically looks at
technology and says, we need to develop the best technology here in
this country, and then for national security reasons, we are going to
put our arms around it and prevent the rest of the world from getting
it, it will be protecting our national security.
  There are a number of flaws with this theory, but the biggest one I
want to point out is, once again, the global economy. There is access
to this technology from other countries other than the U.S. We cannot
stop that. By implementing these policies, all we are doing is
restricting U.S. companies' ability to participate.
  The biggest point I want to make on restrictions of technology, this
is not, and I repeat, not a choice between business and national
security. If that was the case, absolutely, we would choose national
security, end of story. The point is it does not help because these
countries access the information elsewhere.
  Take encryption as just one example, a simple software designed to
protect programs. We restrict the exportation of top-of-the-line
encryption technology, but top-of-the-line encryption technology is
available from a number of other countries, and in fact we can download
it off the Internet.
  Our restrictions do not prevent these other countries from getting
it, they only prevent our countries from being the ones that are able
to sell it. In the long run this even harms national security by
restricting our ability to develop the next best technology. We need to
reexamine our policy of export controls for all of these reasons.

                          ____________________

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[Congressional Record: April 21, 1999 (House)]
[Page H2242-H2243]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr21ap99-112]


            U.S. POLICIES RESTRICT GROWTH OF CERTAIN EXPORTS

  The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Washington (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Washington. Mr. Speaker, one of the most important
issues we face as a country and will continually face is the issue of
economic growth, basic prosperity, creating an economy where all of our
constituents can have good jobs that last and enable them to take care
of themselves and their family.
  We must always be thinking of ways to increase economic growth, to
increase economic prosperity to provide those jobs. I think that is one
of those basic and fundamental services that I think of myself
providing for the people I represent in the 9th District of the State
of Washington, is to try to help do what we can to encourage a strong
economy, and one of the cornerstones of a strong economy is exports.
  In order to create a possibility for economic growth, we have to have
a strong export market, and a few basic facts make this point clear.
Ninety-six percent of the world's population lives outside of the
United States. But despite the fact we only make up 4 percent of the
world's population, we consume 20 percent of the world's goods and
services and products.
  So we can basically look at those figures and realize that if we are
going to have economic growth, it is probably going to have to occur
outside of the United States. We are going to have to do something to
get access to that 96 percent of the world that does not live here.
  There is massive potential for growth in those markets for all of our
products. Technology products, goods, services, you name it, exports
are an incredible possibility for growth. Currently we have a number of
policies in the U.S. that restrict the ability of those exports to
grow, and that is what I want to address the House about today.
  Now, there are some very good reasons for why these restrictions on
exports exist. Unfortunately, as times have changed, those reasons are
no longer valid, so it is very important that we reexamine our policy
of restricting exports. And there are two that I want to touch on
today. One is unilateral economic sanctions, and the second is
restrictions that we police on the exportation of certain technologies,
certain software and certain computers.
  When we look at the issue of unilateral economic sanctions, it is
important to first look at why we do it. We do it because we want to
change the policies of other countries, policies that we are absolutely
right in condemning and wanting to change, policies such as
restrictions on religious freedoms, restrictions on democratic
freedoms, restrictions on economic freedoms, and basic human rights
concerns.
  Unilateral economic sanctions are perceived as one way to get other
countries to change those policies. But the problem is we live in a
global economy, and in a global economy a unilateral, which means only
us, the U.S., placing export restrictions on our companies doing
business with other countries, does not get us there because those
other countries have dozens of other options. They can go to other
countries and get their goods and services elsewhere, and all that
happens is that we lose market share and those policies that we are
concerned about do not change.
  Economic sanctions, in order for them to work, must be multilateral
in order for them to have full impact. I brought a chart with me today
to show my colleagues, in red, the countries that we have placed some
sort of economic restriction on. In other words, these are countries
that there are some sort of restrictions on U.S. companies exporting to
them. These are markets that we are shutting off or reducing access to
for U.S. companies.

                              {time}  1445

  Mr. Speaker, the important point here is it just does not work. If it
worked, if we could actually change human rights policy, change
democracy policy, change economic repression through a policy of
unilateral economic sanctions, certainly it would be worth doing it,
but it does not work. We need to reexamine that policy.
  Mr. Speaker, we have a bill in the House to do that sponsored by the
gentleman from California (Mr. Dooley), who spoke earlier on this
issue. I think it is critical that we support that.
  On technology, we restrict it for a slightly different reason. We
restrict it for national security concerns. Perfectly valid concerns,
but the question is: Do our restrictions on encryption software and
computers actually help national security? I would argue, first, that
they do not and, second, that they actually hurt our national security
interests.
  This technology is not something we can put our arms around. It is
growing so fast and in so many countries other than the U.S. We are not
the only ones making encryption software in computers. Other countries
are doing it. Therefore, these countries that we want to restrict
access to will get access to it anyway. All we will do is hurt our own
companies and hurt their ability to grow.
  This is not a choice between commerce and national security. In fact,
I would argue that our national security could be best enhanced by
opening up these markets to our U.S. technology companies so that U.S.
technology companies can continue to be the leaders in technology and,
therefore, share that technology with our national security interests.
We are not going to be able to get the sort of interplay back and forth
between the private sector and our defense companies if Germany or
Canada or any number of other countries suddenly is out in front of us
in technology. We will lose our national security edge.
  So, paradoxically, the policy of restricting the ability of our
technology

[[Page H2243]]

companies to have access to other markets for goods like computers and
encryption software winds up harming our national security policies.
  The world has changed. It is global, and technology is very
accessible. We need to reexamine old policies that no longer accomplish
what they set out to do.

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