Curbs on Exports Fall Short, Critics Contend

The agreement reached Friday by the United States and its allies to reduce export controls on high-tech equipment sold to the Soviet Union and Eastern Europe has disappointed many U.S. technology manufacturers that had hoped for even greater business opportunities with the emerging economies of Eastern Europe.

In fact, according to some U.S. manufacturers and their trade association representatives, the newly liberalized controls may be of greater benefit to foreign competitors that specialize in many of the less-advanced technologies released for export.

“The direction of the decision is correct, but it didn’t go far enough,” said Michael Dutton, a Washington trade representative for International Business Machines. “This won’t have much benefit for us at all.”

The American Electronics Assn., which represents computer makers, said the new agreement won’t open many new markets for U.S. computers in the Soviet Union and its former satellite nations because the pact maintains restrictions on key technologies that are built into those systems.

For example, an AEA official noted, while personal computers and workstations are no longer banned from export under the accord, restrictions remain on key computer networking technology that is built into most machines these days. The net effect is that these machines won’t qualify for export, the official said.

“The deal isn’t as good for the electronics industry as it would appear, or as we had hoped,” said Richard Iverson, AEA’s executive director.

Telecommunications equipment manufacturers had a mixed reaction to the pact. The lifting of export restrictions on telecommunications equipment to Poland, Hungary and Czechoslovakia would open a potential $750-million annual market to U.S. manufacturers, a trade analyst for American Telephone & Telegraph said.

However, he said, telecommunications equipment makers were also bitterly disappointed that the new agreement did not lift restrictions on exports of materials such as advanced fiber-optic cables needed to improve the Soviet Union’s internal telephone system, a potential $1-billion annual market.

In other cases, an AEA representative said, the technologies removed from the restricted list are so outdated that they are no longer made by U.S. companies. “It may be that the only (companies) to benefit would be the vendors of used equipment,” said Deborah Wagener, a trade policy analyst for the AEA.

Wagener also complained that the pact continues export bans on state-of-the-art technology, an area where U.S. manufacturers tend to outperform their foreign competitors.