By Marina Malenic
President Barack Obama yesterday announced a series of steps toward implementing a new U.S. export control system first revealed in August.
During a meeting with his “export council” of advisers, Obama said the proposed changes are essential to spurring an economic recovery.
“One strategy that will help us…create good jobs that pay well today and create new markets for jobs tomorrow…is to increase our exports to the rest of the world,” Obama said.
“The more our companies export, the more they produce,” he added. “The more they produce, the more workers they hire.”
The president said every $1 billion increase in exports supports more than 5,000 jobs.
The administration earlier this year announced a goal of doubling U.S. exports over five years. Overhauling the rules for selling sensitive technolgy abroad and scrubbing the two U.S. export control lists is the cornerstone of the reform effort.
Defense Secretary Robert Gates has described the new approach as building “higher walls around fewer, more sensitive items.”
Obama yesterday unveiled draft criteria and procedures to be used for determining whether a specific item will be subject to export control regulations. The new process would establish three tiers into which “dual-use” items will be placed to distinguish the types that should be subject to various levels of control.
The highest tier would include “critical” technology available almost exclusively from the United States. A second tier would include items that “provide a substantial military or intelligence advantage to the United States” but can be bought from U.S. and allied countries’ companies. The third tier would be for widely available technology for which the license requirement could be waived.
The reform plan would also establish a “bright line” between lists run by the State and Commerce departments. The lists would allow for controlled items to easily be grouped on a master list of controlled items, according to a fact sheet released by the White House.
Once an item is placed into one of the tiers, a licensing policy will be assigned to it. According to Obama, this framework would help to focus agency scrutiny on the most sensitive systems while making it easier for companies to sell items in the bottom tiers overseas.
Meanwhile, the State Department released a draft regulation that would overhaul part of the U.S. Munitions List. The proposed regulation would remove 74 percent of the items now on that list, according to a statement released by the department.
The Commerce Department also rolled out a proposed regulation that would create its own new set of licensing procedures.
“The proposed regulation would create a new license exception that would allow exports of controlled items…to countries that are members of all four multilateral export control regimes or other regime members that also are members of NATO,” states the White House fact sheet.
The defense industry has long advocated an overhaul of the U.S. export control regime, which many companies view as overly burdensome. The administration has responded with the new plan.
The Aerospace Industries Association, a lobbying group, praised the effort.
“We welcome the administration’s continued interest and attention on streamlining and strengthening the U.S. export control process,” said Jim Albaugh, president and CEO of Boeing‘s [BA] commercial division and chairman of AIA.
“Having an effective and efficient export control system strengthens our national security and advances American competitiveness across the globe,” he added.
The administration is seeking public comment on all three prongs of the proposal.
“We want input from businesses, from Congress and from our allies as we complete this reform,” Obama said.