Tuesday, April 20, 2010

Serious question: does anyone give a damn about export-control reform? (UPDATED)

Because seriously, I know a lot about this. I think it's pretty boring, and I think most other people think it's boring, but I used to be involved in it professionally and can probably tell you a whole lot about it if suddenly you've got the itch.

The reason I ask is that Secretary Gates, following up on a directive by President Obama last August to undertake a thorough review of the USG's export-control regime, today made a major speech to a meeting of the Business Executives for National Security outlining exactly why the old system isn't working and how he envisions the reform process going.

The fact is . . . America’s decades-old, bureaucratically labyrinthine system does not serve our 21st-century security needs or our economic interests. It is clear our current limitations in this area undermine our ability to work with and through partners to confront shared threats and challenges – from terrorism to rogue states to rising powers. Our security interests would be far better served by a more agile, transparent, predictable, and efficient regime. Tinkering around the edges of our current system will not do.

For these reasons and more, in August of last year, the president directed a broad-based review of the U.S. export-control regime. He has called for reforms that focus controls on key technologies and items that pose the greatest national-security threat. These include items and technologies related to global terrorism, the proliferation and delivery systems of weapons of mass destruction, and advanced conventional weapons. In short, a system where higher walls are placed around fewer, more critical items.

Following this directive, and informed by a recent National Intelligence Council assessment of the key national-security considerations, I have worked closely with my counterparts at the departments of State, Commerce, Homeland Security, as well as with the director of national intelligence and the national security advisor to develop a blueprint for such a system. Our plan relies on four key reforms: a single export-control list, a single licensing agency, a single enforcement-coordination agency, and a single information-technology system.

This is sort of a big deal, I guess, especially when considered in concert with the SECDEF's article in the May/June issue of Foreign Affairs advocating for security assistance reform (about which more later). Export-control reform can be seen as a significant part of streamlining the security assistance process, making it more flexible, agile, and responsive -- something that everybody wants.

So if you care about this, tell me. Or if you have questions, ask them. We can go into this deeper, and I can provide you with a whole lot of context and explain why this is important to national security, or how the old system works, or why the new system will or won't be better, or whatever, or we can all be happy to say "export-control regime(s) being reformed and streamlined, check, duly noted, carry on smartly," etc. It's up to y'all.

(Note that this reader discretion does not extend to security assistance reform, which I am going to beat you over the head with whether you like it or not. But again, more on that later.)

UPDATE: I initially forgot to include the link to this transcript of a "senior defense officials" press briefing on export-control reform from Monday (prior to the SECDEF's speech).

While we're at it, here's some other coverage, too: Post / Spencer / Hill / Reuters

And Bernard Finel pops in to usefully link us to Evelyn Farkas' report on the subject for the American Security Project, which strikes me as thorough and well-done (if perhaps a touch OBE as a result of these most recent announcements).

18 comments:

  1. WTF?

    Gulliver, I did not understand this post at all. But it made me laugh.

    "Because seriously, I know a lot about this."

    Now, that is objectively funny. Because seriously, I know a lot about stuff, too.

    Seriously, what the heck does any of this mean? You think it's a silly topic for Secretary Gates to be involved with or something?

    Never mind, I'm in the weeds work-wise which is likely affecting my comprehension skills, such as they are to begin with....

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  2. Seriously, what the heck does any of this mean? You think it's a silly topic for Secretary Gates to be involved with or something?

    No, not at all. I'm being totally sincere, which I know is probably sort of disarming/confusing. I'm saying that I could write a whole lot about this subject if people are interested or want to know more than they can read in the Politico story, but I just genuinely don't think anybody cares all that much about the brass tacks. (I'm not sure I do either.)

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  3. Art Vandalay cares about both export AND import controls.

    SNLII

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  4. Art Vandalay cares about both export AND import controls.

    "How 'bout this? How about, he's thinking of quitting the exporting, and just focussing in on the importing. And this is causing a problem, because, why not do both?"

    No more pop culture references, SNLII, or we'll annoy Madhu again. Dumb and Dumber just about caused a riot in here last week!

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  5. No, the pop culture references are the only things I understand around here.

    I read those Armor COIN threads and posts, you know. The lot of them, over here and over there (Small Wars Journal)

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  6. Because I am procrastinating, although, you know what? I'm almost caught up. Almost.

    - Madhu

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  7. I think it's interesting and I don't get the pop culture references.

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  8. Good question and interesting discussion. I'm midway through Niall Fergusen's The Ascent of Money (H/T Schmedlap who I guess in on an internet sabatical) so I'm going back to my econ roots to try to determine some explanation of where we are today.

    On a side note, I'm begining to think Lil is my long lost blog soeur.

    Perhaps, the converse (and crux) of this dilemma is found in our lack of tariffs and giving away our intellectual property through the guise of globalization and modernization. I don't know the specifics, but I can quantify that we've given a lot of shit out for free when it comes to our ingenuity in e-commerce, outsourcing, microprocessors, hard-drives, and such. Not to mention the privacy market of burned DVD's and Bollywood.

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  9. To pile on with SNLII, are we talking about potato chip export controls?

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  10. From what I've read about the changes proposed, the reform would reduce the time it takes from months to days on requests to the state department.

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  11. @ Gulliver:

    Oh I get it now.

    Yes, this is an interesting topic and if you want to write more about it, please do!

    @MikeF:

    About the ripped off DVDs and Bollywood; I know, right? Come on, pen your own scripts Bollywood people! You didn't pay for it and it's mostly boring, boring, boring the way it is....and it shows in ticket sales, apparently. Not having a good time of it lately, I think.

    The last Bollywood film that I watched and liked was based on a Bengali novella: Parineeta.

    The English translation is available via Amazon and the bit I skimmed was GORGEOUS (it's about 100 years old and the writing is, well, gorgeous) but I have banned myself from buying any more books.

    Later all,

    - Madhu

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  12. Here is the link:

    http://www.amazon.com/Parineeta-Saratchandra-Chattopadhyaya/dp/0143033565/ref=sr_1_1?ie=UTF8&s=books&qid=1271812281&sr=1-1

    Okay, how did we go from export controls and Secretary Gates, to Seinfeld quotes, to Bengali novellas circa 1914?

    Really going this time....

    - Madhu

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  13. My only explanation for Gates' ire is that, when the US govt decides to pour $40 billion in arms sales into the Middle East and the export control process screws it up and delays said shipment, there must be some very frustrated and nervous budget people in the Building.

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  14. I probably worded this post poorly, because it seems that people don't really understand the titular question. I'm not being sarcastic, and I'm not being rhetorical. I'm not suggesting anything about the sensibility or silliness of the Administration's having undertaken a review. I'm asking if people want this subject to be covered here in greater depth because I have a sort of unique knowledge about the subject.


    Anon @ 2002 -- From what I've read about the changes proposed, the reform would reduce the time it takes from months to days on requests to the state department.

    This is probably true for certain types of low-risk, high-frequency exports to close allies and partners, but it misses the real point of this new, genuinely fundamental reform. The Bush Administration undertook a course of action designed to shave time off of the licensing process and turn out uncontroversial licenses quicker, but this process aims to do something altogether more significant: to essentially un-control all but the most potentially threatening bits of technology to all but the most dangerous end-users, which will (as second order effects) speed the process and allow for a certain predictability for applicants and potential end-users alike.


    Jason -- My only explanation for Gates' ire is that, when the US govt decides to pour $40 billion in arms sales into the Middle East and the export control process screws it up and delays said shipment, there must be some very frustrated and nervous budget people in the Building.

    First off, I'm not sure that we should describe this as "Gates' ire," considering that 1) he doesn't seem particularly aggrieved about this subject and 2) he's not the only (or the primary) driver on this.

    Also, your facts are a little off: the US is doing $40B in arms sales worldwide, not to the ME alone (though those countries do amount to a significant chunk).

    Export controls DO definitely have an impact on foreign military sales through technology disclosure policies (for US-used platforms and systems) developed by the services, but the far bigger part of this is licensing for direct commercial sales (which is to say a US company selling directly to a foreign buyer, which requires a license if the item being sold is controlled). It also impacts third-party transfers, as in the example the Secretary gave in his speech: under the current regime, if Australia wants to supply spare parts to Britain for a US-made plane -- and here we could be talking about something as simple as a bolt or a latch, which is controlled because it was manufactured specifically for use on a military plane -- the Aussies have to get a USG license to transfer that "technology."

    So there are delays involved, definitely, and it annoys the hell out of our partners. It's not so much a matter of budgets, because when it comes to foreign military sales, you can't even sign a contract until all the disclosure/licensing hurdles have already been cleared.

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  15. I hope you all have seen the recent report on this by the American Security Project: http://www.americansecurityproject.org/content/wp-content/uploads/2010/04/US-Export-Controls-Consensus-and-Risk.pdf

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  16. Bernard -- Thanks for the link. I've just skimmed the report, and it strikes me as being comprehensive and well-done.

    I only fear that the former characteristic makes it inaccessible or intimidating to the average citizen, a feeling that is reinforced by some of the questions asked by reporters in the "senior defense offical" briefing on Monday.

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  17. Big G: maybe it's how you count the sales. ACA says $20B to Muslim nations, another $20B requested by Israel. But I take your point. Yes, by all means, please continue.

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  18. maybe it's how you count the sales. ACA says $20B to Muslim nations, another $20B requested by Israel. But I take your point. Yes, by all means, please continue.

    I think you misread this data point. The ACA says Israel requested $20B in FY08, not 2009.

    These numbers are also a touch misleading for a couple of reasons. First of all, this is just stuff that's notified to Congress, which (as you can see from the introductory paragraphs at your link) means that it's only major defense equipment over a certain dollar threshold. We sell to a LOT more countries than this, it's just that a lot of the stuff falls below the notification threshold.

    Second, not all stuff that gets notified to Congress gets sold in the same FY, or even at all. The Brazilian F-16 case is an example: Congress was notified so as to allow the USG to proceed expeditiously if U.S. F-16 was selected in Brazil's fighter competition.

    I don't know why the notified number for FY08 is so damned huge, because FY09 was the biggest year ever for actual executed sales ($37.9B). We did $36.4 in FY08.

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