WASHINGTON : Iraq Considerations May Change Technology-Export Bill

Congress is trying to open doors for the sale of more U.S. computers, telecommunications equipment and other advanced technology overseas.

With export regulations expiring Sept. 30 and the Cold War declared over, bills passed by the House and Senate remove many restrictions on the sale of U.S. technology that has both commercial and military applications.

The Export Administration Reform Act (S. 2927), which the Senate passed Sept. 13, makes it easier to export high-tech goods to Eastern Europe and sharply reduces the items subject to export controls. In June, the House approved a less restrictive bill, the Export Facilitation Act (H.R. 4635). Differences between them will be resolved in a conference committee.

But final legislation may be affected by fears of Iraq, which has used Western technology to develop chemical weapons and ballistic missiles and to try to build a nuclear bomb.

The Senate already has approved an amendment, introduced by Sen. Jesse Helms (R-N.C.), that would expand the Defense Department’s ability to block exports to Iraq, Iran, Libya and Syria. The Pentagon can already block exports of sensitive technology to certain Communist-bloc countries.

“The focus of both bills is Eastern Europe and the recognition that these are friendly countries,” said a staffer on the House Foreign Affairs Committee. “But now there is this other category of countries that are not following the norms on the use of chemical weapons and missile technology.”

The staffer predicted that many restrictions will be swept away. But he said more attention will be paid to controls over missile technology and possibly supercomputers, which can be used to design missiles and nuclear weapons.

Others hope to derail major provisions of what they see as a dangerous weakening of safeguards by contending that U.S. high-tech goods could flow more easily from Europe to countries such as Iraq and Libya under the new rules.

One target will be a House provision that gives the Commerce Department virtually sole control over what technology goes on the export list and must be licensed for sale overseas. The provision restricts the role of such national-security agencies as the Defense Department and the Arms Control and Disarmament Agency.

“Commerce is in the camp of the exporting industries. They’re cheerleaders at the same time they are supposed to regulate exports,” says Gary Milhollin, who tracks chemical, missile and nuclear weapon developments as director of the Wisconsin Project on Nuclear Arms Control in Washington.

Business interests will fight attempts to retain the previous restrictions or impose tougher ones. Even the Senate bill “doesn’t go far enough,” said William Archey, international vice president of the U.S. Chamber of Commerce.

White House Opposes Federal Data Access Act

The Bush Administration may be penny-wise and pound-foolish in its opposition to legislation to create a program that would provide a Technology Access Program.

For some small business operators, just knowing where to look for federal data and experts is half the battle. The advantage of the legislation sponsored by Rep. John J. LaFalce (D-N.Y.) is that it would integrate the whole cross-section of available federal databases and provide one point of access.

While acknowledging at a recent hearing before the House Committee on Small Business that the proposed legislation (H.R. 4659) would be an important tool for making federal research available to small businesses, Raymond G. Kammer, deputy director of the National Institute of Standards, said it would duplicate programs already in existence.

“It is important in this period of fiscal austerity that we do not spend time and money reinventing the wheel,” he said in voicing the Administration’s view.

Indeed, there is a long list of federal databases designed to spread the fruits of the government’s $70 billion in annual research among the private sector. Among them are the Federal Research In-Progress Database and the Federal Applied Technology Database. The departments of Defense and Energy, the National Aeronautics and Space Administration and a dozen other federal offices operate their own databases and provide some outside access.

“Under TAP, a business in need of technical assistance does not have to call 14 people and wait three weeks in order to get help,” said LaFalce, chairman of the Small Business Committee.

“It does not have to know the 10 different protocols needed to access 10 different databases. And it does not need to hire a staff of information-retrieval experts. Under TAP, all a business needs is access to a personal computer and a telephone in order to have the very best technical expertise in the country at its fingertips.”

The bill has received enthusiastic support from the business community. Testifying in favor, Leo Reddy, president of the National Coalition for Advanced Manufacturing, said, “This bill responds to the most glaring gap in America’s performance in the field of technology--getting existing, off-the-shelf technology more rapidly into the hands of industry.”

The legislation also has substantial backing in Congress. The House leadership voted in July to make it a lead item in a package of high-tech initiatives.

The bill has been divided into two sections. The first would authorize the National Institute of Standards and Technology to create a user-friendly database of federal experts, technologies and research projects. It has been attached to the bill reauthorizing the Commerce Department, which is in conference committee.

The second section would allow Small Business Development Centers to provide grants to defray the cost of using the program or training small businesses to use the databases. It may be attached to the reauthorization of the Small Business Administration. After that, TAP’s future will depend on the outcome of the budget summit.

Hearing Set on Changes in Franchising Rules

A hearing is scheduled this week on franchising, which has been called the most dynamic business arrangement since the creation of the corporation a century ago.

Franchising employs more than 7.2 million workers and accounts for an estimated $600 billion in goods and services a year. The combined sales of franchise businesses now accounts for a third of all U.S. retail sales and could reach half by the end of the decade.

Despite this, LaFalce of the Small Business Committee says there is a “surprising lack of comprehensive and accurate information about franchising.”

The hearing may cover the basic fairness of franchising agreements in protecting the franchisee, the adequacy of federal and state regulatory procedures and the operation of franchise arrangements.

“These are critical policy issues that have not been addressed in any comprehensive fashion by Congress since the mid-1970s,” said LaFalce, who will hold the hearing.