Mr. Chairman, members of the Subcommittee, I appreciate the opportunity to testify before you today on S. 149, which would reauthorize the Export Administration Act ("EAA"). As a former Assistant Secretary for Trade Administration and Under Secretary for Export Administration in the Administration of President Ronald Reagan, and as a former Staff Director of the Banking subcommittee with export control oversight responsibility, I believe that I can offer some perspective and some background on this issue. 13 years ago, I testified in front of this Committee on behalf of the Reagan Administration, during the hearings that led up to passage of the Omnibus Trade Act of 1988, the last time that the Congress passed comprehensive legislation to re-authorize the Export Administration Act. From the time that I left office in 1989 until fall of 1998, I was an international trade consultant, specializing in technology transfer issues; so in addition to my administrative experience, I believe that I can also bring the perspective of someone whose clients have been regulated by export control policy to my discussion of the issue.
Today, I will be speaking on behalf of AMT – The Association for Manufacturing Technology, where I am the Director of Government Relations. AMT represents 370 member companies, with annual sales ranging from less than $2 million to several hundred million, who make machine tools, manufacturing software, and measurement devices. Industry sales total nearly $7 billion, and exports account for more than one-third of those sales.
In your invitation you asked that I address the specifics of S. 149, which is similar to S. 1712, the EAA bill that the Senate failed to acted upon during the 106th Congress. I will focus my testimony on that bill and how I believe that it will affect the United States business community, in general, and the U.S. machine tool industry, in particular.
By way of introduction, however, and to put my comments into perspective, I would also like to discuss the multilateral export control regime and how that regime has affected U.S. policy, particularly in China.
The most important point to be understood with regard to United States export control policy is that while it is ostensibly aimed at keeping dangerous technology out of the hands of the so-called pariahs, or rogue states, the really important issues revolve around the question of what to do about China. Unfortunately, the China issue is being addressed unilaterally by our Government, because there is absolutely no consensus within the Western alliance about how to treat technology transfer to China.
The end of the Cold War led to the end of CoCom -- the international coordinating committee that regulated technology transfer since 1949. When CoCom officially went out of business on March 31, 1994, our leverage for limiting technology transfer to China on a multilateral basis disappeared as well. CoCom was created in the same year as NATO, and it stood with NATO as one of the pre-eminent tools of the containment strategy that guided our policy for more than forty years. The guiding premise was that the West could not match the Soviet Union and its allies man for man, tank for tank, or even missile for missile. Moreover, if the West maintained tight multilateral controls over the transfer of technology to the East, we could use our superior technology as a force multiplier that would tip the scales to our benefit. The Soviets and their allies could produce great numbers of weapons and keep large numbers of men under arms, but our technological superiority would more than compensate for that numbers deficiency. One example of the validity of this assumption was demonstrated in the 83 to 1 victory of U.S.-built F-15s and F-16s over Soviet-built MIG 21s and MIG 23s over Lebanon’s Bekkha Valley in 1982. While pilot skill played an important role in that victory, technology was the critical factor.
The successor regime to CoCom, which is named the Wassenaar Arrangement, after the Dutch city in which it was formed, came into existence in 1996. Unfortunately, Wassenaar has none of the elaborate rules or discipline that characterized CoCom. Most importantly, the United States Government no longer has a veto over the goods and technologies exported to the target countries of Wassenaar. The current multilateral export control regime is based on what is known as "national discretion." Each Wassenaar member makes its own judgments about what it will and will not license for export and, as a matter of fact, whether to require an individual validated license ("IVL") at all. Other multilateral export control regimes, whose focus is non-proliferation (such as the Nuclear Suppliers Group, the Missile Technology Control Regime, and the Australia Group), do obligate signatories to require an IVL for the export of proscribed items to non-members, but Wassenaar does not.
China is not identified as a target of Wassenaar. In fact, during the negotiations which led up to the formation of Wassenaar, the U.S. representatives explicitly assured other potential members that Wassenaar was created to keep dangerous weapons and technologies out of the hands of the so-called rogue and pariah states: Iran, Iraq, Libya, and North Korea. China was never mentioned as a target of Wassenaar.
This brings me to an important point about the lack of both national and international consensus regarding China. Judging from official statements over the past decade, it is unclear what U.S. technology transfer policy toward China is. China is obviously seen as a major trading partner, and great effort is put forth to ensure that U.S. companies obtain a major share of the China market, which is predicted to be the largest in the world in most capital goods categories over the next decade. Clearly, however, China is also viewed by U.S. licensing authorities as a potential technology transfer risk. This is reflected in the fact that the U.S. Government is far more rigorous (and more time-consuming) than any other industrialized state in reviewing and disapproving licenses for exports to China.
There is a myth that has grown in the popular media that U.S. technology transfer policy toward China is lax. This myth is fed by disgruntled Defense Department employees who are against improved trade relations with China in high technology manufactured goods. The facts, particularly with regard to machine tools, indicate quite the opposite. Nothing could be further from the truth than the assertion that the U.S. Government is soft in its review of exports to China. The U.S. Government has consistently been by far the most rigorous with regard to reviewing license applications for exports to China. Other countries within the Wassenaar Arrangement simply do not share our assessment of the risk factors involved in technology transfer to China and have generally maintained a far less stringent licensing policy. Indeed, one could say, without any equivocation, that our European allies maintain what could only be described as a favorable export licensing policy toward China. This can be illustrated by the following data.
Based on evidence gathered informally at Wassenaar meetings by the AMT technical advisor to the U.S. delegation, the following machine tool license processing times could be expected if an export license for the shipment of products or technology destined for China were to be applied for in major industrialized countries:
The United States – Several months – up to a year – is the norm for difficult cases.
Germany – The longest it could possibly take is 30 days, although many take less time for processing. For a while there was a 24-hour turn-around promised by the licensing office, but because the big companies tended to camp out in the office and monopolize this service, the licensing agency has discontinued it. Nonetheless, it is only in cases of pre-license check that it takes as long as 30 days.
Italy – They expected 30-day turn-around, with extraordinary cases involving pre-license checks to take as long as 60 days.
Japan – For their part, the Japanese said that the norm was two to three weeks, with up to a month in the cases where there was some sort of pre-license check.
Switzerland – The Swiss said two days was the norm, with the possibility that a license could take as long as 7 to 10 days to process if it were difficult.
Subsequent reports by commercial and economic officers posted at embassies in those countries have confirmed these informal license processing time estimates. When these comparative timeframes were raised with U.S. Government officials, the response that AMT received from them was that the various agencies involved almost always processed licenses within the 30-day time limit that the statute prescribes. But this time estimate fails to take into account times when the clock is stopped in order to obtain more information from the exporter, which is a quite frequent occurrence. And, even more significantly, the 30 days does not include the time that it takes to complete the Government’s end-user check, which is almost always a very time consuming activity. U.S. companies are judged by their customers not merely by the time that any particular agency of the U.S. Government completes its license processing but rather by the total elapsed time that it takes for delivery from the moment that the order is placed. Any legislative provisions aimed at improvements in the licensing process must include improvements in the total licensing time, not just the time that licensing officials actually have physical possession of the license.
As I have argued, the total elapsed time that it takes to process a license is only part of the problem. Official licensing statistics demonstrate that the United States Government is far more likely to disapprove machine tool licenses for China than any of our European competitors. (This is true in many other sectors such as scientific instruments, semiconductor-manufacturing equipment as well; but I will concentrate on machine tool exports, where I have the most complete data.) While a mere handful of U.S. machine tool licenses have been approved during the period from 1994 to 1999 (a total of 25 licenses, or five licenses per year), trade statistics indicate that our European allies have shipped a huge volume of far more sophisticated machine tools to Chinese end-users.
China is the largest overseas market (in dollars) for U.S. machine tools, and it has the potential to grow significantly from its current total of machine tool imports from all sources of $2 billion. However, unlike other East Asian markets where U.S. market share has been substantial, U.S. machine tool sales represent a relatively small percentage of the Chinese market.
For example, South Korea is at a similar point in its economic plan as China. Both South Korea and China are developing their auto industries, high-volume consumer durables, small and medium combustion engines, and second-tier aerospace industries. Both China and South Korea have indigenous machine tool industries, but the development of their respective metalworking industries requires imported machine tools.
There is a major difference, however, in the way U.S. export control policy views the two countries. Korea is an ally of the United States and U.S. export control policy reflects that. By contrast, the U. S. government’s implementation of the Wassenaar export control list toward China is highly restrictive. One result is that in 1998, the last year in which we have complete data, China imported only 9.9 percent of its machine tools from the U.S. By contrast, Korea, which is not subject to restrictive U.S. export controls, imported 22.3 percent of its machine tools from U.S. providers. If one attributes the difference in import totals to the difference in U.S. export control policy toward the two countries, it can be argued that the cost to U.S. machine tool builders of the restrictive export control policy is approximately a quarter of a billion dollars per year in lost export sales to China.
A major reason for this differential is that Western European countries are exporting to China modern machine tools that would be unlikely to be licensed by the U.S. government. As evidence of this, the average unit prices of European machine tools in categories likely to be subject to controls are up to 250% higher than the average unit prices for machine tools in the same categories exported from the U.S. to China. In 1996, while the average unit price of machine tools sold to China by U.S. manufacturers was $155,000; the average unit price of those sold by Italy was $208,000; by Switzerland $348,000; and by Germany $407,000. Average unit prices are a key indicator of the sophistication, accuracy, and productivity enhancement of machine tools. Those factors are accounted for by higher precision, five-axis (and above) machine tools that perform more productively and thereby command a higher price. But it is precisely those characteristics that cause a machine tool to be listed on the Wassenaar list of presumably restricted technologies. If this is true, the statistics indicate that Europeans are shipping to China machines that, had they been produced in the United States, would be very rigorously reviewed by the U.S. Government, with a low probability of their being granted an export license.
The U.S. Government’s rigorously enforced limits on machine tools significantly disadvantage U.S. machine tool builders in the global marketplace, since China has proved able to buy from a variety of foreign makers. The most rigorously controlled machine tools are those that possess five axes. A recent survey by AMT indicated that there are 718 different models of five-axis machine tools manufactured around the world, with 584 different models made outside the United States in countries such as Japan, Germany, France, Italy, Sweden, Spain, and Taiwan. There are even six models manufactured in China (as the Chinese themselves displayed at the Beijing Machine Tool Show in 1999).
One U.S. company reported, based on its agents’ personal observations, that between 1993 and 1996, fifteen large, five-axis machines tools were purchased by Chinese aerospace end users. All fifteen were made by Western European manufacturers. In addition, Shenyang Aircraft purchased twelve five-axis machine tools in one year alone. These machine tools came from Italian, German, and French factories and not a single one from American machine tool producers.
Chinese importers often wish to buy several machines at one time to upgrade a factory or to complete or augment a production line. The inability of U.S. manufacturers to guarantee delivery of a particular machine tool requiring a license has an amplified effect on sales of machines that do not require a license. For example, Germany’s market share of machine tools imported by China is more than double the U.S. market share. The trade figures indicate that by freely selling the same sophisticated machine tools to the Chinese which would be most likely unavailable from United States manufacturers, German and other European providers are also garnering sales in the non-controlled machine tool categories as well, further disadvantaging U.S. manufacturers.
This is made even more frustrating to U.S. machine tool builders and their workers by the fact that many of the commercial aircraft factories in China contain joint ventures and co-production arrangements with American airframe and aircraft engine companies. In other words, despite the fact that these Chinese factories are supervised, or monitored, by American executives (or at least have a strong American presence to assure the production of quality components), U.S. Government export control policy creates a situation in which machine tools in those factories are almost certain to be supplied by European machine tool builders. How does that assure our national security?
As I have noted, while machine tool license applications to China are likely to be approved in a matter of days, or weeks, by our European allies, U.S. applications languish for months, or longer. Executives of U.S. machine tool companies have told me that they have decided to forego business in China if it involves an export license application. That is how discouraged they have become by the current licensing process. For their part, as recently as last month the Chinese told U.S. companies that, in the future, they will not even ask them to bid for business, since the Chinese experience with the U.S. licensing process has been so negative and so time-consuming. For those U.S. companies who are still asked to bid, the Chinese have begun to demand a guarantee from those manufacturers that they will be able to obtain an export license from the U.S. Government for the product in question, with a penalty built into the contract if that guarantee is not met. Obviously, this is a further deterrent to doing business in China. It is expensive enough to bid on business in China, without having to undertake the added risk of a monetary penalty for failure to obtain an export license on a timely basis.
A very recent example will illustrate many of the problems inherent in attempts by U.S. companies to obtain an export license for machine tool sales to China. Last year, an AMT member asked for my assistance in obtaining final approval for an export license that had been already been pending for many months. The Chinese, who were making purchases for an aircraft engine plant, informed the AMT member company that they were at the end of their patience in waiting for U.S. export license approval. This particular company had been delaying the Chinese buyer repeatedly, while it attempted to obtain an individual validated license for two five-axis machine tools. After waiting many months the Chinese cancelled one of the two machines on order, but gave the company one last chance to obtain the export license from U.S. authorities for the remaining machine. The company was particularly eager to gain approval for this license, because its owners believed that there would be follow-up orders for as many as a dozen additional machines is they could prove that they could obtain a license for this one. The U.S. Government was aware that a Swiss company had offered to fill the order for these machine tools, and, in contrast to the American company, the Swiss made it clear to the Chinese that there would be no security conditions, or compulsory visitations by the Swiss company if they were given the business by the Chinese.
In order to create an incentive to approve the license, the AMT member company offered to provide special software that would limit the use of the machine tool to only a small group of activities approved by the U.S. Government and to provide regular visitations to ensure that the machine tool was only be used for the jobs described in the license. While all this was being negotiated, the State Department declined to demarche the Swiss Government to warn them of the U.S. Government’s concerns with the sales of machine tools to the Chinese plant. Negotiations between the AMT member and the Defense Department dragged for another two and one-half months, with none of the AMT member’s security or post-shipment visitation proposals deemed adequate by DoD. Finally, just as the license, which had by then been pending for six months, was about to be escalated to the Cabinet level for resolution, the Chinese buyer informed the AMT member company that they had lost patience with U.S. licensing process and cancelled the order. As it turned out, the Chinese plant manager had decided instead to go with the Swiss machine tool alternative, which required no post-shipment conditions and which had already obtained a license from its government months earlier.
Reportedly, when informed of the Chinese cancellation and the need to return the license without action, the comment of the Defense representative inter-agency review panel (known as the Operating Committee) was that he was happy because DoD had achieved its objective; no U.S. machine tool would be going to that Chinese factory.
Of course, the U.S. machine tool would have gone to that factory under strict conditions with numerous follow-up visits to ensure that it was being used for the purposes stated in the license, while there will be no guarantee that Western authorities will be able to check on the projects on which the Swiss machine tools will be used. Nonetheless, DoD was apparently happy, having accomplished its objective of blocking the U.S. sale, and, I presume that the State Department was happy as well, since it did not have to offend any of our friends or allies by taking a strong position or asking uncomfortable questions of them. The only ones who are unhappy are the owners of the U.S.-based machine tool company, who may very well move production offshore to avoid a repeat of this unpleasant and unproductive process; and, of course, the employees who may lose their jobs are not very happy either.
I would ask the Committee to consider what this case illustrates about the national security benefits of our current export control policy, other than the fact that such a policy is likely to maintain machine tool employment in Switzerland. It certainly did not have any appreciable effect on Chinese ability to obtain machine tools for whatever aerospace projects they deem appropriate.
This inability to sell into the market while foreign machine tools are freely exported to China is particularly burdensome for the U.S. machine tool industry, because recent market projections have indicated that China will represent the largest and fastest growing market for commercial jet aircraft in the first two decades of the 21st Century. As recently as 1995 China represented less than two percent of Boeing sales, today China represents more than nine percent, and Boeing estimates that China will be the largest market outside the U.S. over the next 20 years. Within the next six years, China could account for nearly 25 percent of Boeing’s total business.
In 1992, ninety percent of Boeing’s aircraft components were built in the United States. Today, more than half the components are imported. China’s exports to the U.S. of civilian aerospace components have grown 63 percent in the past five years. Moreover, Boeing’s acquisition of McDonnell Douglas has given them an operation in which half of the MD-90 (and its successor, the 717) built each year are wholly constructed in China. Given the tremendous market power that China will possess, it is certain that the Chinese Government will demand and receive what are known as "offset" contracts to build ever greater shares of Boeing’s aircraft in their own aircraft factories on their own machine tools. If the trend I have described continues, and licensing policy does not change, U.S. machine tool builders are highly likely to be displaced and replaced by their foreign competitors who will be able to take advantage of a far more lenient export licensing policy to make the sales to stock the new productions lines that the Chinese will demand.
Machine tool licenses to China are but one example of a larger problem -- the lack of international consensus about how to regulate technology transfer to China. Whatever technology transfer concerns the U.S. Government may have about China are not reflected in the largest and most active multilateral export control regimes to which we belong. The absence of a China reference in Wassenaar means that there are no internationally agreed upon rules or standards that the U.S. Government can cite to induce our allies to follow our lead with regard to China technology transfer policy
Indeed, our former adversary Russia is a charter member of the Wasssenaar Arrangement, and China would see any United States Government attempt to make them a target of this export control regime as a hostile act. In fact, discussions were held in 1998, with the goal of making China a Wassenaar member. I note all of this in order to provide some perspective regarding the degree to which the United States Government lacks leverage in denying technology to China. The United States Government may decide not to sell machine tools, or satellites, or scientific instruments, or semiconductor manufacturing equipment to China, but that does not obligate the Japanese, the Germans, or the French to follow our lead.
That is a fundamental problem with the current export regime. Not only does it indicate a lack of discipline regarding a country with which the United States Government has indicated technology transfer concerns; it also puts U.S. companies on an uneven playing field with regard to sales to what is likely to be the fastest growing and largest market for capital goods over the coming decade. Repeatedly over the past few years, whether it is in the category of machine tools or scientific instruments, the United States Government has taken a negative approach to technology transfer to China while our allies have not. The result has been that the Chinese are denied nothing in terms of high technology, but U.S. firms have lost out in a crucial market. This serves neither our commercial nor our strategic interests.
The Committee is well aware of the fact that the authority of the Export Administration Act will lapse on August 19, 2001. As you also know, in the 1990s, both the first Bush Administration and the Clinton Administration extended that authority under the pretense of an emergency that did not exist by virtue of invoking the International Emergency Economic Powers Act ("IEEPA"). The EAA, which was extended repeatedly under the authority of IEEPA, was last amended in a significant way while I was serving the Reagan Administration as Under Secretary for Export Administration, in 1988, a year before the fall of the Berlin Wall and three years before the collapse of the Soviet Union. These facts would seem to be reason enough to justify the passage of a new, revised EAA to guide export controls in the 21st Century. That is why, with the proper changes, AMT sees great value in S. 149. A comprehensive rewrite of the Act is long overdue. I will now comment on what I see to be the most valuable and important elements of S. 149. I will also point out a serious defect.
As I see it, one of the most beneficial provisions of S. 149 is that it has a very strong provision defining "foreign availability" in terms of the reality in which U.S. companies compete today. Current law defines "foreign availability" as any item that can be supplied from outside the multilateral export control system in sufficient quantity and comparable quality so as to make the existing export controls on any particular item ineffective in achieving the objective of the controls. S. 149 seeks to adapt that element of current law to the era in which we live today, which is an age of weak to non-existent multilateral controls and a multilateral system with rules of the game that allow any member country to decide whether to license a product on the basis of "national discretion." Importantly, the bill acknowledges that "foreign availability" can exist within a multilateral control system, not just outside that system.
The key provision in S. 149 is found in Section 211(d)(1), which states: "The Secretary shall determine that an item has foreign availability status under this subtitle, if the item (or a substantially identical or directly competitive item) (A) is available to controlled countries from sources outside the United States, including countries that participate with the United States in multilateral export controls [emphasis added]; . . ."
I would consider the inclusion of such language in any EAA reauthorization reported by this Committee to be of critical importance to the creation of a fair and equitable "foreign availability" definition, one that reflects the new reality in which U.S. companies find themselves. Any new EAA should not be allowed to perpetuate the fiction that the current multilateral export control system functions effectively to deny technology to targets of that regime, particularly China, which I have argued has, at best, an ambiguous status in relation to the Wassenaar Arrangement’s list of restricted technologies. Not to give U.S. companies the right to petition for relief from a system which allows trade competitors to use the multilateral system to garner new business by taking advantage of lax, or non-existent, national export control systems, would be to perpetuate an anachronism in the law, one which would be grounded in an era that no longer exists.
That is a very positive provision in your bill. In addition, I feel that the mandate to the Administration, contained in Section 601, to strengthen the existing multilateral export control regimes and to annually report to Congress on progress in that endeavor potentially has great value. But this is such a critical area that I would suggest that you strengthen the mandate substantially and create some sort of an oversight mechanism to provide pressure on the Administration to vigorous pursue the multilateral goals established in the section.
As I have argued, Wassenaar provides weak guidance and almost no discipline upon its members. In some ways, it is worse than having no multilateral regime at all, because it gives the appearance of restricting technology transfer, while leaving all the key judgments up to its constituent members. To get an idea of how weak an export control regime it really is, one only has to ask what useful information the United States Government can obtain about the technology transfer decisions of other regime members. Under the rules of the Wassenaar Arrangement, the United States Government is not entitled to information about the licensing decisions of any other regime member unless that member is licensing an export to an end-user to which the U.S. Government has previously denied a license. And then, the Government in question is only obligated to inform the U.S. Government within sixty days of the decision to license, most likely after the technology or product in question has already been shipped. Such an obligation on Wassenaar members can hardly be called discipline.
I agree with the goals created in Section 601, that revisions of the Wassenaar Arrangement charter ought to include far better regime member discipline, including improved rules for information exchange. One idea that Section 601 proposes that would particularly valuable would be to institute the "no undercut" rule within Wassenaar. The "no undercut" rule obligates all members of the regime to deny a license to any end-user who has been denied a license by any other member of the regime. The adoption of that rule alone would ensure that U.S. companies, such as those I have described in the machine tool industry, are not alone in denying their products to end-users in China when their licenses are denied by the U.S. Government. This amounts to unilateral export controls, and it is particularly frustrating, because the current Wassenaar Arrangement export control regime allows the Chinese to simply turn to another Wassenaar member in order to obtain the very same product, frequently with no delay or conditions. In the process, the Chinese are denied nothing, while the U.S. companies develop a reputation as unreliable suppliers.
I have noted what I see to be among the most positive aspects of
S. 149, but there is one provision where I see a great potential for mischief. That is Section 502(b)(3). I believe that it would be a mistake to reverse the inter-agency decision making structure created by the Executive Order of 1995. Until issuance of the 1995 Executive Order, referral of most licenses was at the discretion of the Secretary of Commerce. The Executive Order authorized all relevant agencies to review any export license submitted to Commerce. But, in return for this comprehensive review authority and also to facilitate the movement of the licensing process along toward the final decision, reviewing agencies would have to complete their review within rigorous time limits, and, importantly, any dissenting agency’s representative to the first level of inter-agency dispute resolution (the Operating Committee) would have to convince his or her policy-level supervisor to formally challenge a decision, rather than the licensing officer having the authority to veto and escalate on his or her own authority. It is important to understand that the inter-agency process created by the 1995 Executive Order allows any dissent by representatives of the Defense, State, or Energy Departments to be escalated all the way up to the President if the policy level of the dissenting agency concerned is dissatisfied with the results of its appeal.
I am convinced that reconfiguring this system into one that requires consensus at all decision-making levels, as is prescribed in Section 502(b)(3), would have the result of introducing a low-level veto back into license processing. Any one individual licensing official, in any agency, could then delay a license for a considerable amount of time, with little or no justification. This, almost certainly, would lead to vastly greater numbers of license denials and, without doubt, much greater delays and lost sales in the cases of those licenses that do ultimately receive approval. Remember, as I recounted in the case study cited earlier in my testimony, the elapsed time that a license takes before it receives approval is the enemy of U.S. exporters almost as much as license denials. The machine tool industry has already seen a significant number of cases where the customer simply got tired of waiting for a license to be issued by the U.S. Government and turned to the foreign competitor, who invariably was waiting in the wings armed with a validated export license for the same product containing authorization to ship approved by his home Government.
I am afraid that Section 502(b)(3), as it is currently drafted, would reverse what little progress there has been in a system that is already too complex and too slow to enable the machine tool industry, among others, to compete effectively in China with our foreign counterparts. I would urge the Committee to reconsider this provision.
We need more than just a "feel good" China policy, or a "feel good" renewal of the EAA. We need to ask if it is possible to convince our allies to share our strategic vision of China (assuming that we ourselves have concluded what that vision is). At the current time, we do not have a multilateral technology transfer organizational structure that is conducive to entering into a debate about China -- let alone one that would be able to enforce standards and rules about technology transfer if such a consensus were to be reached. Without such a multilateral technology transfer structure and without a clearer idea of what U.S. technology transfer policy toward China ought to be, it will be difficult to draft an EAA that is an effective guide to policy.
I hope that these comments will be helpful to your consideration of
S. 149, which reauthorizes the Export Administration Act and brings it up to date. I would be happy to answer any questions that the Committee might have.
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