Mr. Chairman, members of the Committee, thank you for this opportunity to discuss the
multilateral nonproliferation and export control regimes which form the basis of America's
export controls. A full understanding of the role and strengths of these regimes is necessary as
the Committee works on creating a renewed Export Administration Act to meet the needs of the
I would like to provide the Committee with a brief description of the four multilateral regimes:
the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group (NSG), the
Australia Group (AG) for biological and chemical weapons, and the newest regime, the
Wassenaar Arrangement for conventional arms and related dual use technologies. In reviewing
the four regimes, I will set forth their common elements and provide an assessment of their
effectiveness in countering the proliferation of weapons of mass destruction and the spread of
advanced conventional arms. While addressing all the multilateral regimes, I would like to focus
on the newest one--the Wassenaar Arrangement, as there has recently been much discussion
about its effectiveness and the role it plays in furthering U.S. interests.
Your interest in the activities of the multilateral control regimes is timely. The spread of
technology around the world, a phenomena sometimes called globalization, means that the
United States is constrained in ways that it never was before when it comes to the effectiveness
of unilateral embargoes, export controls or licensing policies. As technology is increasingly
available to other nations and the production base for high tech items spreads to other areas of the
globe, cooperation with our regime partners not only sets the limits for effective export controls
but becomes the essential ingredient to an effective nonproliferation policy.
In addition, a well coordinated, focused export control program ensures that U.S. companies will
be able to engage in legitimate trade and to compete effectively in the international market place.
This in itself is an important national security issue. Today, our military relies on a strong high
tech sector to continue to develop and manufacture new and better products. Yet it does not buy
enough by itself to keep them healthy. Instead, in a globalized economy, exports have become
the key to growth and strength for the industries critical to our defense forces.
As our military continues its transition to Commercial Off the Shelf items (COTS), due to the inability of military procurement of specially designed items to keep up with fast changing commercial technologies (particularly electronics), the civilian sector will increasingly drive advanced weapons development. Our future military strength is directly tied to the health of the civilian companies that produce the products it buys. The equation is simple: exports = healthy high-tech companies = strong defense. Cripple our companies by denying them the right to sell through ill-advised export control policies, and our own military development is handicapped.
The Interagency Process
Four U.S. agencies have key roles in determining U.S. objectives and positions for the
multilateral regimes. These are the Departments of State, Defense, Commerce and, for the
Nuclear Suppliers Group, the Department of Energy. Each agency brings a unique expertise to
the international negotiations.
Agencies cooperate in the development of U.S. positions on what should be controlled by each
regime, the licensing policies and practices that should be followed, the types of information that
should be shared among member countries, and the procedures for cooperating on investigative
matters. U.S. positions are usually arrived at by consensus among agencies. However, if
disputes arise, their resolution and overall coordination are the responsibility of the National
With its team of industrial experts, Commerce provides key technical advice on the state-of-the-art of various industries as well as the economic and trade consequences of changes to dual-use
control thresholds. These are essential ingredients to the development of meaningful U.S.
negotiating positions, as trade and economic competitiveness issues often figure highly in other
regime members negotiating positions. After negotiations are completed and international
control levels and procedures agreed, Commerce is responsible for promulgating the
implementing regulations, managing the interagency licensing process, and providing the
business community with information through publication and seminars on its rights and
obligations under the new rules. Commerce also provides many of the experts for technical and
outreach activities of the multilateral regimes. This process has been in place for many years and
Let me now turn to a brief overview of the multilateral export control regimes. Building
multilateral institutions to allow like-minded nations to cooperate in addressing international
issues has been a central element of U.S. foreign policy in this century. The best examples of
this include the United Nations, NATO, and the World Trade Organization. For arms control ,
the United States participates in four groups of like-minded countries. Each of the four regimes
are the result of diplomatic efforts to develop common approaches among partners to commonly
perceived security threats--chiefly the spread of weapons of mass destruction.
In the beginning, the membership of these regimes was primarily among our Western allies. One of the successes of this Administration has been, in light of the end of the Cold War, to broaden membership and to include our former opponents from the Warsaw Pact nations. This has significantly strengthened the regimes by including more supplier nations. The four regimes are:
The Nuclear Suppliers Group (NSG). Following the 1974 explosion of a nuclear device by
India, the United States proposed the formation of an informal group of nations concerned with
the proliferation of nuclear weapons. While initially the NSG focussed only on nuclear
materials, under U.S. leadership in the early 1990s, the NSG expanded its control list to include
dual-use items needed for the production of nuclear weapons. Controls are focused on two
categories of goods: nuclear material, equipment and technology unique to the nuclear industry,
and so-called nuclear dual use items that have both nuclear and non-nuclear commercial
applications. In 1992, the NSG published Guidelines and an Annex setting forth how members
should proceed in imposing restrictions on affected exports and listing the items that each
member nation should make subject to export controls.
The Missile Technology Control Regime (MTCR). The United States and six other countries
created the Missile Technology Control Regime in 1987 to limit the proliferation of missiles
capable of delivering weapons of mass destruction. Its membership has expanded markedly
since then. The MTCR, like the NSG, is not a treaty-based regime, but a group of countries that
have agreed to coordinate their national export controls to prevent missile proliferation. The
MTCR has been strengthened in recent years by the willingness of a number of nonwestern
countries to either join the MTCR or to adhere to its guidelines and controls.
The Australia Group (AG). The Australia Group was formed in reaction to the Iran-Iraq war
when it became evident that Iraq and Iran had used chemical weapons in violation of the 1925
Geneva Protocol. In 1985, Australia called for a meeting of like-minded supplier countries to
consider harmonizing export controls on precursor chemicals for chemical weapons. This group
subsequently extended its scope of concern to include controls on chemical production
equipment and technologies that could be used for chemical weapons. In 1990, the scope of the
AG was further extended to include measures to prevent the proliferation of biological weapons.
Today, Australia Group countries cooperate in curbing the proliferation of chemical and
biological weapons through the coordination of export controls and an exchange of information.
The Wassenaar Arrangement. With the end of the Cold War, COCOM, the venerable cold war
institution which blocked the transfer of high tech items to the Soviet Union, was seen by many
NATO Allies as no longer necessary. Russia's new government also asked for an end to cold-war era trade restrictions. However, the Clinton Administration was concerned that the
elimination of COCOM would leave a serious gap in multilateral export controls, permitting the
uncontrolled sale of advanced conventional arms and related dual-use production equipment to
countries of concern, namely Iran, Iraq, Libya, and North Korea. Former COCOM members
were joined by the Russian Federation, the Czech Republic, Hungary, Poland, the Slovak
Republic, Argentina, the Republic of Korea, and Romania in the new multilateral regime. The
objective of the Wassenaar Arrangement is to ensure that member states' national export policies
do not contribute to the development or enhancement of destabilizing conventional military
capabilities, primarily by promoting transparency in the transfer of both arms and dual-use goods
Each of the regimes has a different task. However, if we look at them, a number of common
elements emerge. I am not suggesting that there should be one common regime - one size does
not fit all when it comes to proliferation problems. But international diplomatic practice has
evolved a set of parameters within which the nonproliferation regimes operate. Let me describe
these parameters, given the central role that multilateral controls must play in any new Export
First, it is important to note that the four regimes are not based on treaty obligations, unlike
NATO or the U.N., for example. They are based instead on agreements and informal
arrangements reached among like-minded nations. While this means that none of the regimes are
binding under international law, each of the members treats its regime obligations as a binding
international commitment. Each regime also operates on the basis of consensus in developing or
amending guidelines, procdures, and lists. All members must agree to any change before a new
item can be controlled or a new objective adopted by the regime.
Second, each of the regimes has agreed procedures and control lists. While the procedures differ
widely from regime to regime, they guide both regime activities and member states' national
policies in controlling the export of agreed lists of goods and technologies. However, in
implementing the procedures and lists, each regime operates under the principle of "national
discretion." This means that each member can decide how it will carry out regime obligations.
None of the four regimes has a COCOM-style veto over exports. In COCOM, proposed exports
were vetted among the members. If one objected, the export was denied. Member nations were
willing to cede this element of their sovereign power in 1949, when COCOM was created,
because of the grave and immediate risk posed by Stalin to the West. Since that time, no other
regime, whether founded in the 1970s, the 1980s or the 1990s, has had the veto.
"National discretion" is guided, of course, by consultation and information exchange among
regime members and each member must be able to defend its implementation as consistent with
its regime obligations. At the end of the day specific export control decisions are the prerogative
of each individual member.
Third, in the absence of a veto, increased cooperation and information sharing among regime
members becomes essential. Regular meetings are held in each regime to coordinate the
activities of the members. A key part of these meetings is the exchange of information, often
sensitive, on projects of proliferation concern, acquisition programs by proliferator states and
other useful information. In addition, several of the regimes have formal procedures for the
exchange of information on export licenses. The most common is notification of denials. When
one partner has formally denied an export because of a concern that it might be contrary to the
purposes of the regime, it will notify the other members so that they can deny a similar request.
In the MTCR, NSG, and AG, this denial notification is buttressed by a "no undercut" rule.
Wassenaar members also has a "no undercut" provision, but it needs to be strengthened. In
Wassenaar, there is a post-facto exchange of exports of "sensitive" dual use technologies and a
more limited exchange of information on arms transfers.
Finally, all members maintain their own national export control systems to carry out their commitments to the regimes. While in the U.S. there can be disagreements among agencies over how best to implement the regimes in our national practices, and while the U.S. frequently does more than other regime partners, we are careful to ensure that our export policies and regulations are not contrary to our regime commitments.
Effectiveness is in the eye of the beholder, but most beholders would agree that each of these
regimes, within the limits of what they were designed to do, have made important contributions
to nonproliferation and national security. In particular, the regimes have acted to reinforce and
strengthen the norms of international behavior, wherein responsible states do not attempt to
acquire weapons of mass destruction or destabilizing accumulations of conventional arms. The
export control regimes have built on the experience of many nations to develop stronger,
focussed export controls.
The regimes are also effective in ensuring a degree of commonality in national export controls
which would not exist in their absence. They also provide, through information exchange,
regular meetings and informal consultations among members, a means for coordinating an
international response to particular proliferation problems. The regular meetings provide a basis
for information exchange, diplomatic actions and the furtherance of U.S. policy objectives.
The U.S. has used the regimes to argue strongly for the adoption of "catch-all controls" by other
regime members, and many, but not all, have adopted similar controls. Catch-all controls allow
the U.S. to stop the export of uncontrolled items if destined for a proliferator. The U.S.
broadened its "catch-all controls" in 1991 as part of the Enhanced Proliferation Control Initiative
(EPCI), and continues to encourage the implementation of such controls as an adjunct to
multilateral non-proliferation efforts.
The regimes offer an opportunity to establish shared parameters for control and provide a vehicle
for the continued efforts of the U.S. to encourage our partners to follow similar licensing
requirements and policies. They provide consultative mechanisms for experts to discuss the
technical reasons for controlling particular items. In this way, the lists of items controlled can be
updated and refined to reflect technical developments and international trade.
Regime members recognize that they are not the only sources for controlled items.
Consequently, the regimes pursue bilateral and multilateral outreach and transparency initiatives
to encourage non-members to strengthen their export controls. In this regard, the work of some
of the regimes, such as MTCR, to establish outreach programs, whereby the member states meet
with nonmembers to train them in more effective export controls and to discuss issues such as
the transhipment of goods, have proved particularly useful.
The U.S. does face some problems in our cooperation with other regime members. Since regime
members implement the controls on the basis of national discretion, there can be an uneven
application of controls because member governments can apply differing procedures, policies or
targeted countries for licensing decisions. On occasion, economic interests can carry more
weight and, in instances where consensus is weak, some of our partners place economic interests
There are real differences of opinion among regime members as to whether there can be any
legitimate trade with proliferator nations. While the U.S. may view all trade with countries like
Iran or Libya as potential contributions to WMD programs, our partners do not share this
perspective and see opportunities in these countries for legitimate trade. When the U.S. can
convincingly demonstrate that a proposed export will contribute to a program of concern, our
regime partners will generally support our denials. When our concerns are more diffuse or our
arguments tenuous, our partners are unlikely to defer to our views. "No undercut" provisions can
lessen this problem, but it is not a perfect system. In the NSG, with the exception of Russian
nuclear supply to Iran, there has been excellent cooperation among members in the application of
strict limits on trade with proliferant nations.
The diffusion of technology around the world means that many controlled products are widely
available from sources both inside and outside of the regimes. In addition, many of the countries
that raise proliferation concerns already possess an indigenous capability to produce critical
materials and equipment. Consequently, the export restrictions of the regime members alone will
not prevent the diversion of controlled items to prohibited weapons activities when proliferators
are intent on doing so.
While export controls are important they, are but one tool in countering proliferation. It is clear
that by themselves, the regimes cannot prevent a determined proliferator from pursuing WMD
programs. We have the examples of India or North Korea or Iraq to demonstrate this. Economic
globalization is inevitably weakening controls based only on limiting the supply of technology.
In addition to effective export controls, an effective nonproliferation policy requires a
combination of active diplomacy, regional negotiations, and other means to reduce the demand
for WMD. This is why the U.S. pursues all of these measures in a coordinated effort to fight
This Administration has made significant strides in reinforcing existing regimes and in building
new ones in a security climate much less disposed to cooperation than was the case ten years ago.
We have been criticized by some in the nonproliferation community for not doing enough. I
believe that this criticism is based on an unwillingness to accept that consensus and persuasion
determine the bounds for what can be done with export controls. Where consensus is high and
our arguments persuasive, the regimes have had good effect. This is especially true for those
regimes concerned with the proliferation of WMD. One of the best ways to strengthen export
controls is to continue the work to expand the area of consensus in the regimes. However, in
areas where our partners do not share our security concerns, cooperation has been less
The Wassenaar Arrangement
Of all these regimes, the Wassenaar Arrangement (which controls conventional weapons and
related technologies such as computers, satellites, and machine tools) has achieved the least
multilateral consensus on what needs to be controlled and to whom it needs to be denied. This
lack of consensus limits coordination among regime members and has serious implications for
our national export control policies and regulations. In large part, this reflects the challenge the
U.S. and its allies face in replacing outmoded cold war policies and procedures with viable
security strategies attuned to today's international environment.
Wassenaar is sometimes compared unfavorably to COCOM. When critics point out that
Wassenaar is weaker than COCOM (in its prime), they neglect to mention that in many aspects
Wassenaar does not differ greatly from the other nonproliferation regimes. Where it suffers in
comparison to MTCR, NSG or the Australia Group is in the differing views among Wassenaar
members over what constitutes legitimate trade in the items Wassenaar controls. In the other
regimes, there is general agreement that there should be no trade in WMD and no support for
WMD programs. The same is not true for Wassenaar, which is focused on conventional arms
and related dual use production equipment. Here, there is no international "norm" accepted by
responsible states which prohibits trade in conventional arms, as there is for WMD.
Wassenaar has the most extensive control lists of all the regimes. Most of the industrial
equipment it controls is traded widely and legitimately in commercial markets. As for
conventional arms and related technologies, there is general agreement that, unlike WMD, it is
legitimate to sell arms when the sale strengthens the recipient's capacity for self defense and is in
concert with the seller's security interests.
The stated objective of Wassenaar is to prevent destabilizing buildups of conventional arms and
related dual use technologies. There is a common understanding in the regime that four countries
-- Iran, Iraq, Libya and North Korea-- require particular scrutiny, and there is a commitment
among Wassenaar members to deny sensitive exports to military programs in these countries.
Wassenaar has had some success in this area, particularly in denying advanced conventional
arms to Iran. However, denying arms or industrial equipment to other areas of the world, such as
China, has never been one of Wassenaar's stated goals. And, those who would judge the success
of Wassenaar by such a measure have set up a straw man that dooms Wassenaar to failure. Even
if the U.S. were to propose to deny sales to China as a goal, our partners in Wassenaar have
repeatedly said that China is not a target of the regime. We have numerous examples of our
partners selling to China a Wassenaar-controlled item which we have denied. Indeed, given the
global diffusion of technology, it is not clear that any regime could prevent China from obtaining
the advanced technologies controlled by Wassenaar.
Wassenaar members have agreed that one of the tasks for the Arrangement in 1999 is to review
the effectiveness of the regime. The U.S., as part of this review, is looking for ways that
Wassenaar could be strengthened. We will seek to increase transparency, especially in regard to
arms transfers, and strengthen the no-undercut provisions. What we will not do, given the
consensus rule that governs the regime and the oft-expressed views of our allies, is seek to
establish a veto procedure or to treat China like Iraq or Iran. Our experience in this regime and
others suggests that these proposals would have no chance of success and would damage our
credibility on other important nonproliferation issues. Any reauthorization of the Export
Administration Act will need to take these real world limitations into account.
The ability of the four nonproliferation and export control regimes to enhance global security
will be influenced by the energy and resources that the U.S. is willing to devote to this task.
There is no secret formula that will totally prevent the export of dual-use items that could be used
for strategic or proliferation purposes. What we can do is raise the cost of WMD by winning
agreement among industrial nations to exercise tight controls on critical items. Our own national
implementation of these multilateral controls is and will continue to be a model for others.
When the Export Administration Act was last authorized, the U.S. faced a much greater threat to
its national security than it does now. The past threat posed by the Warsaw Pact gave a certainty
and a coherence to our export controls -- both national and multilateral. However, by consensus
among our regime partners, the multilateral basis of our national export controls is no longer a
single, cohesive, overarching organization of allies. Instead, it is a set of regimes whose goals
are to reduce the proliferation of weapons of mass destruction rather than to preserve Western (or
U.S.) military superiority over a rival bloc through technology denial.
This Administration has had considerable success, building in part on the work of its
predecessors, in creating a set of international norms whereby responsible nations restrict exports
to programs related to weapons of mass destruction or to destabilizing military buildups. Even
so, it is more and more difficult to restrict access by a determined nation to the technologies
needed for very capable weapons. I commend this Committee for taking up the challenge of
designing a new Export Administration Act to reflect that changes that have taken place in the
world since 1988, when the last EAA was enacted.
This concludes my prepared remarks. I would be pleased to answer any questions that the
Committee may have.
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