Export Easing Benefits O.C. Firms : Trade: Licenses have become unnecessary for many high-tech products, allowing computer companies to tap new foreign markets.
Reflecting an easing of U.S. export controls, the value of goods licensed last year for export by Orange County firms fell 67% to $2 billion, according to government figures released Wednesday.
Commerce Department officials said the decline reflects the lifting of export license requirements for computers and other high-tech equipment shipped to Eastern Europe, the Soviet Union and other countries.
“We’ve decontrolled so much that the statistics doesn’t mean that exports have gone down,” said Michael Liikala(, western region director for the Bureau of Export Administration in Newport Beach. “It just means that licenses issued have gone down.”
Since July, the Commerce Department has allowed U.S. companies to ship high-tech products--such as computers based on the popular Intel Corp. 80386 microprocessor--to the Soviet Union and Eastern Europe without an export license.
The looser restrictions have helped computer companies such as AST Research Inc. in Irvine to tap new foreign markets. “After decontrol, we have been able to penetrate new regions, such as Ghana and Gambia in Africa; the United Arab Emirates and Jordan in the Middle East, and Taiwan, Pakistan and Bangladesh in Asia,” said Lydia McClure-Lee, manager of export administration and licensing.
Officials at Western Digital Corp. said the looser regulations have helped the firm make inroads in selling computer products to Eastern Europe. A number of the Irvine manufacturer’s products, including integrated circuits and disk drives, have either been decontrolled or can now be exported under a general license, which virtually assures Commerce Department approval. The company said it is also encountering fewer delays resulting from government red tape.
The less-stringent export rules allowed Emulex Corp., a Costa Mesa computer parts manufacturer, to cut its export staff from three people to one, said Greg Shortell, vice president of international sales.
AST’s McClure-Lee said decontrol allows the computer maker to “assure delivery to foreign customers based on product availability and not on Commerce Department bureaucratic delays.”
Last year, the Commerce Department issued 1,854 licenses worth $2.04 billion to Orange County companies compared to 3,293 licenses worth $6.2 billion in 1989.
Government figures show that 80% of the 1990 licenses issued to Orange County companies were for electronics, medical or precision equipment. In 1989, these products accounted for 87% of all licenses.
“The good news is the figures show the business community that fewer of their products require licenses,” Liikala said. But he said new regulations issued earlier this month would require “greater care among exporters who deal with countries where we have concerns about (military) weapons development.”
In a move prompted in part by problems encountered with Iraq, the Bush Administration earlier this month announced tougher export controls on commercial technology and products that can be used to produce chemical and biological weapons and missile delivery systems. The agency expanded from 11 to 50 the number of chemicals that require export licenses.
“There’ll be some increase in the number of export licenses for chemical, biological and related equipment to certain countries as a result of these new regulations,” Liikala said.
Some industry officials complain that the new regulations will hurt the competitiveness of U.S. industry. They complain that U.S. export policies continue to be driven by national security and foreign policy concerns.
“We’ll be less competitive under the guise of national security while our trading partners can go out and close deals,” said Marilyn Lowe, president of ForeTrade International, an El Toro company specializing in export licensing.
Export Restrictions Relaxed Total Licenses Issued Export licenses issued to firms in the 714 area code. Includes electronics; chemicals, metalloids and petroleum products; metalworking machinery, and industrial and transportation equipment. Number of Permits Issued 1987: 2,910 1988: 3,275 1989: 3,293 1990: 1,854 Values of Permits In billions of dollars 1987: $2.0 1988: $3.7 1989: $6.2 1990: $2.0 Electronics & Precision Instruments Includes high-speed computers, missiles, guidance and tracking systemsand high-speed telecommunications equipment. Number of Permits Issued 1987: 2,611 1988: 2,860 1989: 2,873 1990: 1,487 Values of Permits In billions of dollars 1987: $1.3 1988: $3.6 1989: $6.0 1990: $1.6
