25 Myths About Export Control

In 1941, it took an entire Japanese carrier task force with some 300 planes to inflict 3,000 deaths at Pearl Harbor. Less than four years later, a single American plane dropped a single bomb that killed 100,000 at Hiroshima. A few days after that, a second bomb killed more than 75,000 at Nagasaki, although it missed its target by more than two miles. Since the days when this awesome power was first unleashed, the United States has tried to limit its spread.

It has been axiomatic that the United States would not sell atomic bombs to other countries. And as a corollary, it would not sell the means to make such weapons. Since the 1940s, these two principles have been central to American foreign policy.

First through Cocom, an agreement that successfully denied Western technology to the Warsaw Pact, and then through other agreements not to sell nuclear, chemical and missile technology, the United States and its allies have limited the spread of this technology around the globe. Although controlling exports has never been the sole means of limiting the spread of the bomb, it has been an indispensable part of the effort.

But export control laws are now under siege. The end of the Cold War has triggered pressure from industry to dismantle Cocom, and there is mounting pressure to scale back other export controls as well. But is the world safer after the Cold War? Should less be done to combat nuclear proliferation?

The Export Administration Act is now before Congress and a group of American exporters has mounted an unprecedented campaign to weaken this vital law. If they succeed, developing countries will find it easier to build atomic bombs and long-range missiles under the Clinton administration than they did under either presidents Bush or Reagan.

These exporters hope that Congress and the public have already forgotten the Gulf War. U.N. teams inspecting Iraq found factories full of Western equipment–machines that U.S. pilots died trying to bomb, and that almost gave Saddam Hussein a nuclear weapon. The inspectors wrote in their reports that to stop Saddam from reviving his bomb program, there must be “strict maintenance of export controls by the industrial nations.” And by 1992, the Bush administration had concluded that Iran was following the same purchasing strategy as Iraq–buying Western “dual-use” equipment to make nuclear weapons.

The lesson is therefore clear: the export of American high technology must not come at the expense of American security. Yet, if the claims now being made by some exporters are believed, that is precisely what will happen. Congress and the administration are being bombarded with so much misinformation that exporters’ claims have risen to the level of myths. The purpose of this report is to reintroduce some balance into the debate, by pairing some of the myths with statements of reality.


Myth #1: Export controls do not work. They will never stop the spread of weapons of mass destruction.

Reality: Export controls do work. They buy the time needed to turn a country off the nuclear weapon path. Argentina and Brazil agreed to give up nuclear weapons mainly because of the costs that export controls imposed upon them. And in Iraq, secret documents showed that export controls on dual-use equipment seriously hampered the Iraqi nuclear weapon design team. The Iraqis spent time and money making crucial items that they could not import. The same controls also stopped Iraq’s drive to make a medium-range missile–one that would have been invulnerable to U.S. Patriot defenses. In addition, these controls are now hampering India’s effort to build an ICBM.

Myth #2: Dropping export controls will create jobs, the Clinton administration’s main priority.

Reality: Export controls have only a microscopic effect on employment. The total American economy was about six trillion dollars in 1992. Of that, only four tenths of one percent ($23.7 billion) even went through Commerce Department licensing. And only $790 million in applications were denied–which is one hundredth of one percent of the U.S. economy and less than half the cost of one B-2 bomber. If the American economy were equivalent to a dollar, only four tenths of a penny’s worth would go through export control and only one hundredth of a penny’s worth would be denied a license. Gutting export controls stimulates proliferation, not the U.S. economy.

Myth #3: Export controls are less important after the Cold War.

Reality: In fact, they are more important. With bipolar stability gone, regional tensions are growing. These tensions stimulate the appetite for weapons of mass destruction. The nuclear and missile arms race is still on between India and Pakistan, and still on in the Middle East. As CIA director Woolsey said in his confirmation hearings, “we have slain a large dragon, but we live now in a jungle filled with a bewildering variety of poisonous snakes.” It is illogical to say that because the Cold War is over, proliferation is the main international threat, and then to say that export controls, which are one of the best ways of containing that threat, should be reduced.

Myth #4: The end of the Cold War has made East-West controls irrelevant.

Reality: These controls are still important. Cocom, the Coordinating Committee on Multilateral Export Controls, was built up after World War II to keep Western technology away from the Warsaw Pact. But Cocom is due to end on March 31 with nothing effective to replace it. Western goods will flow into the former East Bloc before those countries can control their own exports. Thus, Western goods run the risk of being reexported through the former East Bloc to Iran, Iraq, Libya or Syria. The East Bloc is now part of the proliferation problem.

Myth #5: Export controls are still locked into the Cold War mode; they must be reduced to reflect new conditions.

Reality: Export controls have already been cut drastically since the Cold War. Since 1988 applications to the Commerce Department have dropped by 75%. Cases have fallen from nearly 100,000 in 1989 to about 25,000 in 1993. The value of goods individually licensed has dropped from over $100 billion a few years ago to just over $20 billion last year, and is expected to fall to only $10 billion in 1994. The reason is simple: fewer items are controlled, and so fewer applications are required. Further cuts will only help nuclear and missile aspirants like Iran and Libya, whom former CIA director Gates accused in 1992 of trying to procure high-technology items for rocket motors.

Myth #6: Export controls put U.S. business at a competitive disadvantage.

Reality: Licensing has little impact on sales. Over 98% of export applications are approved. Over the past four years, the Commerce Department has denied an average of only 323 cases annually, an insignificant number of transactions. Moreover, virtually all advanced countries now control their exports in the same way the United States does. Thus, in over 98% of the cases covered by export controls–which in turn are only a tiny fraction of overall American exports–business suffers no greater burden than filling out a form. U.S. foreign military sales have grown steadily despite control by the State Department’s munitions list. And American firms have already regained the market share they lost in the early 1980s, making the United States again the world’s leading exporter.

Myth #7: U.S. exporters lose sales because approvals take too long.

Reality: The Commerce Department is now meeting its licensing deadlines in 97% of its applications. The average time for approval is only nine days–unless the Commerce Department refers the case for interagency review. The Department of Energy, to which Commerce refers nuclear cases, turns them out so rapidly that Energy spends an average of less than 40 minutes on each.

Myth #8: Export controls cost U.S. businesses over $20 billion per year in lost sales.

Reality: This claim is purely speculative, and it defies common sense. The amount claimed to be lost is nearly equal to the total value of goods licensed yearly by the Commerce Department. Yet over 98% of applications are approved. But even if $20 billion were lost, it would amount to only three tenths of one percent of the American economy. This amount is insignificant compared to the cost of fighting a nuclear Desert Storm, or to the cost of fighting a nuclear war on the Korean peninsula.

Myth #9: Export controls must be multilateral to work.

Reality: Unilateral controls are also essential. Since World War II, multilateral controls have been set up by U.S. example–America adopted unilateral controls first and then asked other countries to follow suit. U.S. diplomats are using this strategy today to help create export controls in the former East Bloc. International leadership is always unilateral. If the United States had waited for Europe, Japan and the Arab countries to agree on what to do when Iraq invaded Kuwait, Iraq might still possess Kuwait today. Instead, America acted unilaterally and asked others to join–using the same strategy it has adopted for export control. Unilateral controls also reflect moral values. The United States did not sell poison gas plants to Libya and Iraq because Germany did, or agree to sell nuclear reactors to Iran and Pakistan because China did, or sell large rockets to India because Russia did. Would a U.S. firm enjoy seeing its logo on the Russian and German-supplied Scuds that hit Tel Aviv?

Myth #10: There should be a short time limit on all unilateral controls.

Reality: It can take years for the United States to convince its allies to adopt multilateral controls. In 1992 the Nuclear Suppliers Group agreed to control more than 60 items that the United States had controlled unilaterally for nonproliferation reasons for over a decade. Premature decontrol of these items by the United States would have prevented this important victory.

Myth #11: U.S. export controls limit the sale of items that are readily available abroad.

Reality: Such items are rarely available. Only a few companies can supply the items now left on export control lists. These lists have been cut drastically in the 1990s, so that only the highest-technology items remain. Almost all of the makers of such items are in advanced countries–countries that use controls similar to those of the United States.

Myth #12: If a foreign competitor is willing to sell an item, showing “foreign availability,” American firms should be able to do the same.

Reality: This pushes export control down to the level of the worst abuser. Germany sold Iraq more pieces of dangerous equipment before the Gulf War than all other countries combined. If American policy had been as lax as Germany’s, Saddam’s bomb program would have advanced much faster. And for exports to Iran, U.S. policy would now have to be relaxed because of sales by Germany, Japan and Switzerland. Moreover, U.S. officials acknowledge that estimates of foreign availability are too imprecise to dictate export policy. Instead of indexing U.S. law to foreign availability, which only benefits proliferators, the United States should pressure new supplier nations to join multilateral control efforts.

Myth #13: Export controls should be dropped when an item is superseded by advances in technology.

Reality: The bombs dropped on Hiroshima and Nagasaki are “obsolete” by modern standards. Should they be exported? Should the means to make them be exported? The first U.S. intercontinental ballistic missiles are also obsolete and after the Gulf War, U.N. inspectors discovered that Iraq nearly made an atomic bomb with the inefficient “calutrons” that the United States abandoned in the 1940s. It is no consolation to be killed by a bomb made with obsolete equipment.

Myth #14: The biggest emerging markets for American goods are in “sensitive” countries.

Reality: This is not true of items controlled for export. Only the highest-performing equipment is now left on control lists. In most of the sensitive countries, only the military is advanced enough to make use of such equipment, or has the money to buy it. The main civilian markets for these items are, and will be, in the developed world. If an exporter cannot survive by selling to its main market, it will not survive through risky sales to a marginal market.

Myth #15: License applications only create a mountain of paperwork, costing U.S. exporters time and money.

Reality: The benefit of licensing outweighs its burden. In addition to preventing dangerous sales, licensing provides an essential tracking function. It allows U.S. and foreign officials to identify buying patterns that can unmask a country’s true intentions. Most exporting firms are accustomed to licensing and go through it with ease. Rather than eliminate this valuable process, it should be made more efficient.

Myth #16: U.S. exports are controlled by a maze of regulations, agencies and special committees that impede rather than help exporters.

Reality: The present system brings the maximum expertise to bear in the shortest possible time. To judge an export application, one must understand how the item could be used to make a weapon of mass destruction, whether the importer is reliable, and whether the claimed use is technically credible. No single government agency has the expertise to do this. The present system relies on experts from the Departments of Defense, Energy and State, and from the CIA and the Arms Control and Disarmament Agency. An interagency process is therefore indispensable. Leading U.S. allies have adopted a similar interagency process. The reason is simple: without referrals there is no expertise, and without expertise one cannot make a competent export decision.

Myth #17: The way to “streamline” licensing is to reduce interagency review and give more power to the Commerce Department.

Reality: The Commerce Department has no substantive competence in strategic technology. Its current function is to manage the flow of cases, referring them to the proper experts in other agencies. It would be a mistake to give Commerce a substantive role for which it is not equipped. Commerce also has a conflict of interests–it must promote exports as well as regulate them. This promotion function is the dominant one; it causes Commerce invariably to champion the exporter’s cause. In 1991, Commerce officials even altered export records on Iraq before submitting them to Congress, doing so in order to conceal embarrassing approvals. In light of its record in Iraq, the role of Commerce in export licensing should be reduced and the roles of the national security agencies should be increased.

Myth #18: We need “higher fences around fewer goods.” Only “chokepoint” technologies should be controlled–items specially designed to make weapons of mass destruction.

Reality: This ignores the lesson of Iraq. Saddam Hussein’s scientists were masters at upgrading medium-tech items to “chokepoint” level. The Iraqis imported equipment that was “dual-use”–capable of making nuclear weapons or long-range missiles but also having civilian applications. The Iraqis bought dual-use isostatic presses to shape A-bomb parts, dual-use mass spectrometers to sample A-bomb fuel, and dual-use electron beam welders to increase the range of Scud missiles. One of those increased-range Scuds killed U.S. troops sleeping in Saudi Arabia. Iran is now following the same purchasing strategy as Iraq. There is no hope of stopping proliferation without controlling dual-use equipment; current U.S. export laws reflect that fact. If “higher fences around fewer goods” is carried to its conclusion, there will be a very high fence around assembled hydrogen bombs, and no controls on the means to make them.

Myth #19: The United States should agree to a license-free zone with other nations that join nonproliferation control regimes.

Reality: This step would destroy the regimes. Iran, Iraq, Libya, North Korea and Syria all joined the Nuclear Nonproliferation Treaty, but it would be folly to sell them nuclear technology. The United States is not about to do so. Nor is it ready to sell them dual-use technology. Likewise, Spain and Italy adhere to the missile technology control regime and want to buy large space rockets. But Spain is reported to be developing a multi-stage missile that will reach North Africa and neither Spain nor Italy can adequately control its own exports. Thus, U.S. rocket technology sold to these countries could be reexported to the very countries against which the regimes are targeted. If an item that only the United States makes is freely sold to the other 25 members of the missile control regime, there would then be 25 potential suppliers to proliferators instead of only one.

Myth #20: Export controls should be based on destination, not on the item sold, which would isolate rogue countries without hurting sales to other markets.

Reality: This would simplify the process by gutting it. Unscrupulous buyers would set up front companies in non-prohibited countries with weak controls and then transship the item to prohibited countries. The Iraqis were masters at this. End-use or end-user checks only catch a small number of violations, because the checking process is costly and because front companies can disappear overnight. An export system based on destination alone leaves honest U.S. exporters more vulnerable to having their equipment turn up in the next Iraq. Moreover, it is diplomatically difficult to name a risky buyer like Syria, which is participating in the Mideast peace process, as a rogue nation. Germany, for example, will not even agree that Iran is a rogue nation.

Myth #21: Export controls are easily defeated by smuggling.

Reality: After the Cold War, Cocom officials toured the former East Bloc to measure the impact of Cocom controls. East Bloc officials said that smuggling was sometimes successful, but spare parts and service were difficult or impossible to obtain. Thus, smuggled equipment often became inoperable, making it risky to build manufacturing operations around it. The way to deal with smuggling, like street crime, is not to abolish laws, but to improve enforcement.

Myth #22: It is unfair to require a license for low-tech goods simply because the exporter “knows” the goods will be used to produce weapons of mass destruction.

Reality: This rule does not bar exports; it only requires a license; and 98% of license applications are approved. Germany and the United Kingdom also have this rule. U.S. exporters have lived for years with the rule for nuclear goods; during the Bush administration it was merely expanded to cover missile and chemical weapon development. The rule encourages the exporter to know his customer and it allows the government to track dangerous programs and slow them down.

Myth #23: High-speed computers are not important for nuclear weapon or missile development.

Reality: The U.S. National Laboratories invented high-speed computers expressly to design nuclear weapons. They are also used to design missile components. They drastically cut the time and money needed for weapon development and they reduce or eliminate the need for tests. The absence of tests can mask a program from detection. In many developing countries, the only institutions that can absorb supercomputer-level technology are run by the military. Decontrolling these computers will allow many Third World countries to build more powerful bombs and missiles, and to build them faster.

Myth #24: High-speed computers are widely available on the world market.

Reality: Only a few countries manufacture such computers, and these countries coordinate their exports with the United States. Moreover, this claim is refuted by publicly-available Commerce Department data. In December 1993, Commerce found that computers were available from foreign sellers only at a speed of 67 Mtops (millions of theoretical operations per second). Only a few years ago, a level of 100 was deemed a supercomputer, powerful enough to deny to proliferant countries. Under industry pressure, however, U.S. computers are now being decontrolled up to a level of 500 Mtops, a dangerous and unnecessary action that will undermine U.S. security.

Myth #25: The 1993 report to Congress by the administration’s Trade Promotion Coordinating Committee (TPCC) is a reliable guide to export policy.

Reality: The TPCC was created to promote exports. It had no mandate to balance trade against security. Its report relied on the advice of more than 2,000 representatives of export interests, and presents the exporters’ point of view. It advocates the most radical reduction in U.S. export controls ever made. Because export control has only a microscopic effect on jobs, the report promotes proliferation but not the U.S. economy.