Thank you, Chairman Gramm for holding this hearing on S.149, the Export Administration Act of 2001. I extend my appreciation to the other cosponsors of this important legislation, Senators Sarbanes, Johnson, Hagel, Roberts and Stabenow. I thank each of them for their help in drafting and supporting this bipartisan bill.
I also welcome back Dr. Freedenberg, Mr. Hoydysh, Mr. Christensen and Dr. Cupitt to the Committee. Thank you for continuing a constructive dialogue on the issues surrounding the reauthorization of the EAA. I look forward to hearing your views today and working with you as this bill moves through the legislative process.
The goal of the EAA of 2001 is to eliminate unnecessary trade barriers, while focusing controls on the items most sensitive to our national security. It establishes a modernized framework to recognize the rapid pace of technological innovation and the realities of globalization, and puts higher fences and more enforcement priority around the most sensitive items and destinations. At the same time it takes into account the realities of today's global economy, incorporating the concept that some items are very difficult to control. The bill recognizes that items available from foreign sources or available in mass-market quantities cannot be effectively controlled.
S.149 builds upon last year's EAA reform bill by making several improvements. We have studied the issue for several years now, with this being the Banking Committee's eighth hearing since 1999.
It is essential that the EAA be reauthorized and reformed this year as the EAA expires on August 20th. There have been long lapses in the EAA as a result of repeated failures to update and reauthorize this important Act in the past decade. As a result, our export control laws have been inadequately governed by either the EAA of 1979, or more often than not, by emergency Presidential authority under the International Emergency Economic Powers Act (IEEPA). This situation has effectively allowed the Administration, instead of Congress, to set the export control policies of the United States. The bill introduced today would place our export control system on firm statutory ground.
Another important, but often overlooked reason for the reauthorization of the EAA is that it would enhance our efforts to convince other countries to implement more effective export controls, particularly in the multilateral export control regime context. The June 1999 joint Offices of Inspectors General report to the Senate Committee on Governmental Affairs pointed out:
"As the United States encourages other countries, such as those in Eastern Europe and Southeast Asia, to implement export controls, it must set the example by sending a clear, unambiguous message that it is committed to export controls. However, it has been 10 years since the expiration of the Export Administration Act, and, in our opinion, this could send the wrong signal to these countries as well as our allies that the United States is not truly committed to export controls."
We currently have a one-year extension of the outdated statute governing export controls. The failure; however, to update the antiquated 1979 Act compromises our position of world leadership in stemming technologies related to the transfer of weapons of mass destruction. Once again, a strong endorsement for quickly updating and reenacting an export administration bill.
In September 1999, the Senate Banking Committee unanimously approved a Committee Print, S.1712, to the Senate. I expect S.149 will also have strong bipartisan support from the Committee as we modify and move forward with this legislation. I look forward to working with my colleagues and other interested parties to reauthorize the EAA during the coming months. S.149 is necessary to advance both our national security and trade objectives. Thank you, Mr. Chairman.