Exporting Trouble

The Washington Post

March 12, 2000, p. B3

With Looser Computer Controls, We’re Selling Our Safety Short

HIGH-PERFORMANCE COMPUTERS aren’t like most other products that U.S. companies sell abroad. They’re more like weapons, the author argues.

Israel has begun to outfit Chinese planes with a powerful new radar, one reportedly able to see targets and help direct air battles as far as 250 miles away. The Clinton administration has been trying to stop this deal, but it is facing a formidable barrier: its own desire to promote U.S. exports.

In fact, the deal is getting a boost from Uncle Sam. The Commerce Department has allowed Israel’s premier maker of military radar, Elta Electronics Industries, to buy two high-performance computers from Sun Microsystems Inc. of Palo Alto, Calif. Elta will be able to use them to outfit the Chinese planes cheaper, faster and better.

This means that if the United States ever has to defend Taiwan, American pilots could be targeted by radar built with American equipment.

Unfortunately, this alarming sale is just a drop in the flood of computers the administration has decided to let American companies sell abroad. On Jan. 23, President Clinton lowered export controls that had blocked scores of American high-performance computers from being shipped to nuclear and missile programs in countries including China, India and Russia.

The truth is, high-performance computers aren’t like most other exports–they’re more like weapons. They are essential to develop the software and hardware that make things like advanced military radar work. And one of the driving forces behind the development of “supercomputers” has always been the desire to design better nuclear weapons and the missiles that deliver them.

That is why Congress has required a control process for international sales. A U.S. manufacturer must notify the government if it wants to sell a high-performance computer to a buyer in a “proliferant” country like China or Israel; then it must wait 10 days. If any federal agency is suspicious of the buyer, the exporter must request a formal license. In practice, roughly 90 percent of the sales meet with no objection. The process, therefore, does not seriously impede exports.

Before Jan. 23, any computer capable of more than 2 billion operations per second fell under those rules. After that date, the bar rose to 6.5 billion operations per second. The administration also plans to decontrol computers performing up to 12.5 billion operations per second later this year. (By comparison, the most popular new desktop PCs perform 1.2 billion to 1.5 billion operations per second.)

These new rules will, for the first time, allow a string of foreign weapons makers to buy powerful American computers that had been specifically denied to them.

Consider some of the buyers who were blocked by the old rules from purchasing high-performance computers from Digital Equipment Corp.: China’s Harbin Institute of Technology, which makes rocket casings and other components for China’s long-range nuclear missiles; the Weizman Institute in Israel, which researches high-energy physics and was the birthplace of Israel’s nuclear weapons effort; the Nanjing (China) Public Security Bureau, whose mandate includes tracking political dissidents.

All those proposed sales involved computers operating between 2 billion and 6.5 billion operations per second. Under the loosened rules, the sales will be able to take place without government interference. Whether they happen or not is up to Compaq Computer Corp., which owns Digital.

And Compaq is not the only company that could profit from the looser rules. IBM was turned down when it tried to supply three computers to China’s Northwest Polytechnical University, which develops engines and guidance systems for large rockets and trains China’s missile forces.

And, of course, there is Sun Microsystems: The two computers it is selling to the Israeli radar maker, Elta Electronics, slip beneath the new control level. So does the computer Sun had previously tried to sell to the Rafael Armament Development Authority, which played a major role in developing Israel’s largest nuclear-tipped missile.

What will these countries do with such computers? Could China use them to make better atomic bombs? Yes. In a study released in 1998, the Department of Energy found that for countries such as China or India to improve their nuclear weapon designs, they will need computers able to perform about 4 billion operations per second. That performance level is right in the middle of the range that Clinton just decontrolled.

How many computers will be exported? According to the General Accounting Office, the old rules have blocked at least 85 high-speed computers from going to potentially dangerous buyers since 1998. These buyers included Chinese organizations “reportedly engaged in military or proliferation activities” and Indian companies “engaged in missile proliferation. . . .”

Astonishingly little money is at stake in these transactions. According to the export license applications, the sale to China’s Harbin Institute was valued at $348,000; the sale to Weizmann at $41,000; and Sun’s sale to Rafael at $25,000. Put this in context: Compaq, for example, has an annual revenue of roughly $31 billion. Why would such a wealthy company want to outfit nuclear plants in sensitive regions of the world for a few hundred thousand dollars? With so much risk to reputation, what is the motivation?

The companies don’t have a convincing answer. Dan Hoydysh of the Unisys Corp., who acts as spokesman for the big computer exporters, comes closest to providing one. “These computers are going to be available from any number of foreign manufacturers, so it makes no sense to control them,” Hoydysh told me. He argues that if U.S. controls weren’t loosened, foreign competitors would step in and make the sales that American companies can’t. The White House accepts this argument. It is contradicted, however, by the independent evidence.

American makers of high-speed computers have almost no foreign competition. Virtually all the computer chips in the world are made by American companies. In 1998, the GAO found that “U.S. companies and their international business partners overwhelmingly dominate the international market for supercomputers.” Only three firms in Japan provided competition, the GAO said, and Japanese export controls are at least as stringent as those in the United States. The GAO reiterated its findings as recently as last November. Another 1998 study, by the Commerce and Defense departments, reached the same conclusions.

Perhaps the most understandable argument against export controls is the astonishing proliferation of increasingly powerful computer chips. Yesterday’s supercomputer is today’s student laptop. Just as it is impossible to stem the spread of information in the age of the Internet, the companies say, the number of powerful computer chips is outstripping the government’s ability to regulate them. “Controlling these machines is simply not feasible,” Hoydysh contends.

He cites IBM’s Aptiva line of personal computers, sold with a chip rated at 2.1 billion operations per second, and Apple’s G4 personal computer, which can perform 2.7 billion. Both exceed the previous control level of 2 billion. Apple, in fact, began a TV ad for the G4 with the words, “For the first time in history, a personal computer has been classified as a weapon by the U.S. government. . . .”

Hoydysh is right that things are changing, and that computers once considered dangerous have become commonplace. That doesn’t mean we should put them into unreliable hands. A machine performing 2, 4 or 6 billion operations per second is still a threat in the hands of an arms maker, however many such machines already exist–just as the prevalence of handguns doesn’t make the one pointed at you any less lethal. The real question is whether it is still feasible to prevent fast computers from going to foreign weapon sites, where they will clearly do harm.

It is feasible, to a great extent, if the government has the will. It would be simple for the United States to publish a comprehensive list of dangerous buyers–in addition to the present list of risky countries. Before selling any computer to an entity on the buyers list, an exporter would have to get a license. This would allow the government to turn down dangerous sales without impeding innocent ones, and enable American industry to keep its competitive edge without arming the world. There will always be the buyer who smuggles, or uses a front company, but it won’t get the parts and service needed to keep a high-tech enterprise going.

The administration did come out with a list of 150 dangerous buyers in India and Pakistan after the two countries tested nuclear weapons in 1998. But so far, it has refused to publish such a worldwide list, saying it would reveal intelligence sources and set off diplomatic conflicts. That is ridiculous: Hundreds of firms in China and Russia are active in nuclear, missile and military production. Their names are well-known. It is fatuous to pretend we don’t know they exist.

The computer industry, indeed, would welcome such a list. “We would support any government effort to identify entities engaged in dangerous activities,” Hoydysh says. “If the government tells us who the bad guys are, we won’t sell to them.” This makes perfect economic sense. Industry wants to concentrate on buyers that don’t present problems.

The industry’s true motive seems to be a desire to be forever first–first in the buyer’s door with the highest processing speed. “Market access” is the term Hoydysh uses. By maintaining that advantage, American firms hope to prevent foreign firms from ever gaining a foothold. Any restriction on the freedom to sell–such as export controls–is seen as a risk. The price of the strategy, of course, is that bomb and missile makers around the world will achieve their goals faster and more efficiently with American equipment.

It is time for the administration to understand that there is more to foreign policy than promoting trade. It is easier, safer and more economical to stop dangerous exports than to defend against the weapons they produce. The revenue isn’t worth the risk. And it is time for the computer industry, which sees itself as forever young, to grow up and accept responsibility for the nation’s security.

Gary Milhollin is executive director of the Wisconsin Project on Nuclear Arms Control.

What Goes Where

To manage the export of high-performance computers, the U.S. government has divided the world into four “tiers” and set standards for what U.S. manufacturers may legally sell there. They are:

TIER I: Western Europe, Hungary, Poland, the Czech Republic, Japan, Canada, Mexico, Brazil, Australia and New Zealand. Any computer can be exported to these countries, with no prior review required.

TIER II: Central and South America (except Brazil), South Korea, members of the Association of Southeast Asian Nations, Slovenia and most of Africa. Computers capable of up to 20 billion operations per second can be sold with no prior review. For faster computers, the seller must obtain a license.

TIER III: India, Pakistan, the Middle East and Northwest Africa, the former Soviet Union, China, Vietnam and most of Central Europe. Computers capable of up to 6.5 billion operations per second can be sold to any user with no prior review. Between 6.5 billion and 12.3 billion operations per second, military users require licenses. Above 12.3 billion operations per second, all users require licenses.

TIER IV: Iran, Iraq, Libya, North Korea, Cuba, Sudan and Syria. The United States maintains an embargo on computer exports to these countries.

Source: National Security Council