Cut High-Tech Export Curbs, Baldrige Urges

Times Staff Writer

Commerce Secretary Malcolm Baldrige, emboldened by President Reagan's "competitiveness" campaign to aid U.S. exports, announced a sweeping proposal Monday to ease or eliminate most current controls on exports of high-technology products and components.

By taking the action, aimed at controls that critics say cost U.S. industry about $9 billion in lost sales a year, Baldrige moved publicly to wrest control of export policy from the Pentagon. The Defense Department, seeking to keep sensitive high technology from reaching the Soviet bloc, has exercised veto power in the sale of computer chips and other sophisticated devices to overseas customers.

The Defense Department official who carries out policy on export control, Deputy Assistant Secretary Stephen D. Bryen, said that most of the 11 initiatives announced by Baldrige at a news conference Monday had not yet been agreed to by the Pentagon and that Reagan had not "signed off" on them.

But a top Baldrige aide, spokesman B. Jay Cooper, countered that most of the disputed items had been discussed in recent weeks at high-level interagency meetings within the White House's National Security Council apparatus, meetings at which "the votes were in our favor. They (Defense) got beaten."

In his own presentation, Baldrige conceded that only two items on his agenda already are established Administration policy. However, he expressed confidence that Reagan eventually will endorse his department's proposals.

To Be in Trade Package

Baldrige cited the "competitiveness" theme that Reagan emphasized in his State of the Union address two weeks ago and pointed out that the President specifically cited reform of export control policy as an objective. The Commerce proposals will be included in the Administration's trade package, scheduled to go to Congress on Feb. 19, the secretary said.

Despite efforts by the Commerce Department to liberalize trade, the Pentagon has maintained a de facto veto authority since the Reagan Administration took office six years ago, according to a recent National Academy of Sciences report on export policy, the conclusions of which Baldrige firmly endorsed.

However, the Pentagon has bitterly disputed the study's criticism of current export controls and termed its estimate of $9 billion in annual trade losses as "rubbish."

Didn't Discuss Plan

Baldrige said he did not discuss the content of his statement with the Pentagon or any other agencies, adding: "I have always believed you should put on the shoe if it fits."

And he took an uncharacteristic public swipe at Pentagon policy and the officials there with whom he has been jousting for years--notably Bryen and his immediate superior, Assistant Secretary Richard N. Perle, a well-known Administration hard-liner.

"Temporary swings of mood in organizations or individuals should not be allowed to impede the long-term decision-making of our business leaders," Baldrige said in a statement. "As our business leaders fight it out in international markets, they have to know that Washington is there to support them--not cut them off at the knees."

The list of new policy initiatives Baldrige announced Monday contains only one item on which Commerce and Defense agree: a plan disclosed last June to permit companies controlled by friendly allied governments to import U.S. high-technology products without requiring the U.S. supplier to apply for an export license.

Privilege Limited

The privilege would at first be limited to members of the Coordinating Committee on Export Controls (CoCom), which includes Japan and all North Atlantic Treaty Organization allies other than Iceland. It would eventually be extended to companies in friendly neutral countries such as Sweden and Switzerland, a concession the Pentagon made about six months ago.

Commerce spokesman Cooper said later that there is no agreement with the Pentagon on three major items in Baldrige's program--items that Bryen said his office strongly disapproves of and on which Cooper said he expects tough negotiations before a unified Administration policy is finally worked out. These are:

--Abolishing licensing requirements for exports of low-level technology to non-CoCom trading partners in the free world.

--Elimination of the requirement that the United States be notified when a product exported to one CoCom nation is re-exported to another.

--More relaxed controls on export of high-technology parts and components to countries abroad, in and out of CoCom.

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