February 18, 2000

MEMORANDUM TO: OPINION LEADERS

FROM: GARY SCHMITT

SUBJECT: Congress, Trade and National Security

Members of Congress will be asked to vote on two significant pieces of legislation affecting U.S. trade and national security: the re-authorization of the Export Administration Act (S. 1712), and permanent normal trade relations (PNTR) for China. Both votes have important implications for national security and, one would think, should take place only after Congress has had a chance to review and debate thoroughly the two measures. In both instances, however, it appears that the preference of the congressional leadership is to hurry the bills through as quickly as possible.

There is a need for a new Export Administration Act. Since 1994, when the most recent legislation governing exports expired, the Clinton Administration has had a virtual free reign to regulate U.S. export policies. And, as the country has learned through the Cox Committee and other investigations, the administration has done a poor job of controlling the export of militarily-relevant technologies to potential adversaries. But now, Banking Committee Chairman Sen. Phil Gramm, S. 1712's sponsor, wants to bring the bill to the Senate floor next week for a vote without any of the key national security committees – Armed Services, Foreign Relations, Intelligence or Governmental Affairs – having had a chance to review its provisions to ensure that the bill adequately protects against the export of dangerous technologies. To their credit, the chairmen of these committees – Senators Warner, Helms, Shelby and Thompson – have asked Senate Majority Leader Trent Lott not to bring the bill to the floor until their committees have reviewed the legislation and held hearings.

And there is a need for a review. As the bill currently stands, neither the State Department nor the Defense Department can veto an export license. In practice, this will dilute the power of the national security bureaucracy, while substantially increasing the sway of Commerce. This is just the opposite of what the Cox Committee recommended.

Meanwhile, in the House, the leadership has announced that it will seek a vote on giving China permanent normal trade status as early as possible. If the leadership has its way, this could take place before negotiations between the European Union and China over the terms of the latter's entry in to the World Trade Organization (WTO) are complete, and before the WTO's own
negotiations with China on the rules governing compliance with its WTO accession are finished. In light of China's history of non-compliance with previous trade agreements, the devil really is in the details here. Forcing a vote before all the facts are known about the terms of Beijing's entry into the WTO is not justifiable, given the potential strategic leverage over China and its economy being permanently surrendered by the U.S. and its allies through these agreements. Before agreeing to give up that leverage, Congress ought to be certain that the benefits that are supposed to flow from China's entry into the WTO will in fact do so. The ludicrous view of Calman Cohen, president of the Emergency Committee for American Trade, that one "can overanalyze" the WTO decision is the exact reverse of how the House and the Senate should reach its decision.

In the case of both measures, Congress is being pushed to act by the business community and by the Clinton Administration. Not surprisingly, national security concerns are taking a back seat. Members of Congress, especially those charged with overseeing the country's foreign and defense policies, should resist this pressure and take whatever time is necessary to review the strategic implications of the proposed bills. There should be no rush to judgment in either instance.