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In Defense of Export Controls, a Political Heresy

Pick any issue in this town and, chances are,  one side or another on that issue is trying to dominate the debate to sway public opinion and elected officials. Spend enough time in court or in the halls of Congress and you’ll quickly learn that no matter is rarely as black and white as the advocates tell you. Every now and then, however, there are dints of sanity in beltway punditry.

Vivian Forbes's St. Thomas More Defending Liberty in the House of Commons. Source: The Center for Thomas More Studies

In an area of law that I follow closely, export controls and economic sanctions, opponents of current laws and regulations tend to dominate the public debate. Export controls and economic sanctions are a favorite scapegoat of this group for a whole host of ills. These are policy tools that should never be used because [insert your pet project or issue argument here].

In reality, the overwhelming majority of U.S. goods and services move freely, without significant restriction, to just about every country in the world. I once heard a senior U.S. official say that U.S. exporters can ship without restriction to about 95% of the world. Some argue that figure is higher.

While export control and sanctions laws could use some updating, they are not the direct or even proximate cause of trade deficits, lack of U.S. global competitiveness, loss of U.S. jobs, or the parade of demons that are bandied about when folks are pressed for failing to perform in any given sector of the U.S. economy. Taxes are a bigger problem.

There are exceptions, but by and large, these export control rules are not as complex to deal with as opponents make them out to be. Some do need updating and, as any legal or policy regime (domestic or national security related) you need to burnish or dust some of them off every now and then, as the agencies do, with significant private sector input. But arguments such as the entire system is outdated or a “Cold War relic” are specious. The latter is a favorite talisman of export control reform advocates, reaching back to Cold War ghosts.

In a recent article in Defense News, former U.S. deputy undersecretary of defense for trade and security policy, and founder and first director of the Defense Technology Security Administration, Dr. Stephen Bryen penned something that amounts to a policy heresy these days, a defense of U.S. export control laws. His article is well worth a read and I hope he keeps writing related pieces. Some excerpts:

You cannot attribute the U.S. decisions [on recent proposed weapon sales] in regard to either Japan or to India as export control decisions. They are policy decisions, and in both cases, the policy decisions reflect strong opinions in the Defense Department, particularly inside the Air Force, as well as in industry …

 … It is illogical to claim there is a major barrier from export controls. The empirical evidence says the reverse. And it makes you wonder if those who are saying so have tongue in cheek…

There is a lot more nuggets in the story. Be sure to read it.

I have advised enough clients on the ins and outs to these matters to confidently say that there are areas where the system needs tweaking, but, by and large, these rules are no more complex that other areas of the U.S. Code. And having worked in the Congress, trying to legislate some of this is probably not a good idea. To their credit, the Obama Administration has picked up where the Bush team left off and has made a yeoman’s effort to modernize the regime. The jury is still out.

Frankly, the one legal regime that could use some updating has nothing to do with export controls or economic sanctions, or even trade, but the tax code. This where folks should focus their political fire. For starters, we have the highest corporate tax rates in the world. It is a boot on corporate America’s neck and needs to go. Yet signs are the Congress and the Obama Administration are focused on politics as usual. Just look at the debate over the debt ceiling. Same song, different players.

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