Export control reform, a longtime goal of U.S. industry, is within reach. An Obama administration review will produce recommendations by year-end, to be followed quickly with an executive order making some changes affecting dual use technologies. Rep. Howard Berman (D-CA), chairman of the House Foreign Affairs Committee, will follow this early next year with legislation to back up the changes. The aim will be to lift trade restrictions where such measures no longer protect national security -- or may even be harming it -- while retaining those on genuinely sensitive technologies.
"This is a once in a lifetime opportunity to fix an extremely flawed and broken area," says Del Renigar, corporate counsel on international policy and trade regulation for General Electric.
Standing to benefit most
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Businesses have long argued that the current system is obsolete. Cold War controls designed to keep sensitive technology out of Soviet hands are making it increasingly difficult for the U.S. to take advantage of cutting-edge research and development conducted overseas. In addition, many of the technologies still under export restriction are freely available outside the U.S. The delays and expense involved in licensing the sale of such equipment, even to longtime allies, drive some to foreign competitors. Suppliers that depend on business from both military and commercial sales are suffering as well. Many are finding themselves pushed to the wall in the current recession.
"This issue is vital not just to a few large defense and technology firms, but to all U.S. manufacturing," says Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.
Since 1994, when the last Export Administration Act expired, the existing rules have been repeatedly extended under emergency powers. There have been several efforts to enact new legislation, most recently spearheaded by Berman in the last Congress. Political opponents have always blocked such efforts by raising concerns that any loosening of existing controls would risk sensitive technology falling into the hands of America’s enemies.
What’s changed is that the government’s national security team is on board. With Defense Secretary Robert Gates and National Security Adviser James Jones leading the effort, it’ll be much harder for political opponents to stop legislation. Buttressing Gates and Jones are a number of recent independent studies arguing that the existing export control system is broken. The most prominent of these is a report published by the National Academy of Sciences in January, entitled Beyond “Fortress America”: National Security Controls on Science and Technology in a Globalized World. Former National Security Adviser Brent Scowcroft cochaired the committee that produced that report and testified on its findings before a House panel in February.
For weekly updates on topics to improve your business decisionmaking, click here.
-
Take Charge of Retirement Spending With This Simple StrategyTo make sure you're in control of retirement spending, rather than the other way around, allocate funds to just three purposes: income, protection and legacy.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
Europe Faces Economic and Political Headwinds Next YearThe Letter Challenges for Europe: Potential tariffs, high energy prices and more competition from China will weigh on the bloc in 2025.
-
Don't Sleep on Japan's Economic TransformationThe Letter After almost three lost decades, Japan — one of the world's biggest economies — is finally showing signs of life.
-
Kiplinger Outlook: Telecom Companies Brace for Tough TimesThe Letter The telecom industry is entering a new era that threatens profitability. But the coming Trump administration will make it easier for the major players to adjust.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
AI Start-ups Keep Scoring Huge SumsThe Kiplinger Letter Investors continue to make bigger bets on artificial intelligence start-ups, even for small teams with no revenue. Some backers think a startling tech breakthrough is near.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
