U.S. Will Relax Most High-Tech Export Curbs

The Bush Administration announced Monday that it plans to end Cold War-era requirements that U.S. firms obtain export licenses on most of the high-technology goods that they ship to other Western countries--a move that will affect about $30 billion worth of trade.

The order, which will become effective in two weeks, is the first formal step that the Administration has taken to ease export-licensing requirements on U.S. trade with the Western allies, a relaxation that American business has sought for years.

Orange County high-tech companies expect to profit from the new rule. Last year, the county applied for 3,293 export licenses valued at $6.2 billion, the highest percentage jump in value of export license applications in the country.

Commerce Department officials said the deregulation primarily will affect three major categories of exports--computers, semiconductor-manufacturing equipment and telecommunications equipment.

Dennis Kloske, undersecretary of commerce for export administration, said the elimination of requirements for export licenses will ease the administrative burden for U.S. firms and make them more competitive within the Western alliance.

Nevertheless, partly to help ensure that buyers do not re-export the strategic technology they receive, the regulations require U.S. exporters to keep on file basic information about the firm that is purchasing their products.

As a result, initial reaction from the business community was lukewarm. William T. Archey, international vice president of the U.S. Chamber of Commerce, said that the easing is welcome but that it is “tempered” by the requirement for added data. He branded the action “an interim step.”

The move was taken on the heels of a June 7 agreement by the United States and its major allies on a sweeping overhaul of Western restrictions on high-technology exports to the Soviet Bloc, expected to ease the way for sales of goods needed to modernize Eastern Europe.

Congress also is moving to force the Administration to liberalize its rules. The 1988 Omnibus Trade Act ordered the White House to streamline previous rules. And a new bill by Rep. Sam Gejdenson (D-Conn.) would eliminate all such licensing requirements by 1991.

However, Administration policy-makers said the process was speeded up by the allies’ accord on East-West trade and by the faster-than-expected movement within the European Community to create a single, integrated European market by 1992.

If the United States had not relaxed its restrictions on exports to other Western allies, it could have left American producers facing a two-tiered export-control process in which U.S. firms were put at a visible disadvantage against European firms in their product lines.

U.S. officials said the United States must next make sure that its own regulations are consistent with those of other Western countries so that the allies can adopt common security standards for high-tech exports by next April 30, as promised.

The relaxation announced Monday will have no impact on current requirements that firms obtain licenses when the products they are selling to a Western country are to be re-exported to a former Soviet Bloc nation. In such instances, previous rules remain intact.

U.S. officials said they probably will have to draft special procedures for technology and equipment that is destined for East Germany--particularly if that country’s scheduled reunification with West Germany is accelerated, as seems more and more likely.

Commerce Department officials estimated that the relaxation announced Monday would eliminate the need for about 20,000 of the 25,000 licenses that the agency issued in 1989 for exports to Western countries, including 90% of those for semiconductor-manufacturing equipment.

William P. Conlin, president of Anaheim-based Calcomp Inc., which makes computer graphic display equipment, said the Bush decision can make U.S. high-tech companies more competitive in the international market.

Calcomp, which exported 60% of its total sales of $450 million last year, expects the new regulation to make it easier for the company to sell in Western Europe. It normally takes two to six weeks to obtain an export license approval from the Commerce Department.

Officials of Advanced Logic Research, an Irvine-based personal computer maker, also were pleased with the move. About 30% of ALR’s annual sales are sold in the international market, most of which go to Western Europe. Last year, it applied in excess of 50 export licenses.

“With the elimination of the need for most computer licensing, we can be more responsive to our customers in Europe,” said Dave Kirkey, vice president of sales and marketing for Advanced Logic Research Inc. in Irvine.