U.S. Export Policy Toward the PRC

Summary

The two principal statutes that govern United States export controls are the Export Administration Act of 1979, as amended, which controls “dual-use” items and is administered by the Department of Commerce, and the Arms Export Control Act, which controls munitions items and is administered by the Department of State. The last major changes to the Export Administration Act were included in the Export Administration Amendments Act of 1985, and in the Omnibus Trade and Competitiveness Act of 1988.

Since the last extension of the Export Administration Act expired on August 20, 1994, the regulations issued under that Act have been maintained in effect under the International Emergency Powers Act by Executive Order. Another Executive Order, issued in 1995, established new procedures and deadlines for processing Commerce Department export license applications.

Prior to the 1995 Executive Order, decisions on export applications that were referred to other agencies were made by consensus. The 1995 Executive Order directed the Commerce Department to send all applications to the Departments of Defense, State, and Energy and the Arms Control and Disarmament Agency for review. It also shortened the maximum processing time from 120 to 90 days. The 1995 Executive Order also revised the Advisory Committee on Export Policy structure to resolve disagreements among the agencies regarding licensing decisions.

Until its dissolution in March 1994, the Coordinating Committee on Multilateral Export Controls (COCOM) was the primary multinational export control organization through which the United States and the other 16 member countries controlled the export of items for security purposes. COCOM was created in 1949 by the United States and the other NATO countries, excluding Iceland and Spain, plus Japan. Later, Spain and Australia joined COCOM. COCOM-proscribed countries included the Soviet Union, other Warsaw Pact nations, and the People’s Republic of China. Under COCOM, member countries allowed other member countries to veto their export cases that required COCOM approval.

In late 1993, the COCOM member countries agreed with the U.S. proposal to terminate COCOM and replace it with a new multilateral mechanism. The COCOM members agreed in early 1994 to continue the COCOM controls on a “national discretion” basis after the dissolution of COCOM until a new multilateral mechanism was established.

Almost two and one-half years after the dissolution of COCOM, a new multinational organization, called the “Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies,” became effective in September 1996. The 33 member countries implement the Wassenaar list of controlled items to countries of concern by “national discretion.” The countries of concern are Iran, Iraq, North Korea, and Libya. In addition to the Wassenaar Arrangement, the United States currently participates in three other multilateral export control regimes: the Australia Group, the Missile Technology Control Regime, and the Nuclear Suppliers Group. The items controlled under these latter three regimes are considered to be under foreign policy controls.

Beginning in 1981, the United States and COCOM members gave the PRC access to higher levels of technology compared with the Soviet Union. This policy of differentiation continued until the Tiananmen Square massacre on June 4, 1989. After Tiananmen, COCOM members did not liberalize controls on any additional items specifically for export to the PRC.

Congress passed sanctions against the PRC in response to Tiananmen, including the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991, which, among other things, required a presidential “national interest” determination, or waiver, for the export of a U.S.-manufactured commercial communications satellite for launch on a PRC rocket. There have been 13 such presidential “national interest” determinations pursuant to the Tiananmen sanctions legislation.

Although the Administration transferred the licensing jurisdiction for commercial satellites from State to Commerce by actions in 1992 and 1996, Congress moved the jurisdiction back to State in the National Defense Authorization Act for Fiscal Year 1999 due to technology transfer concerns.

Since early 1994, the United States has dramatically liberalized Commerce Department export controls on items controlled for national security purposes, which has reduced licensing activity by over 55 percent since Fiscal Year 1993. These export control liberalizations have affected computers, semiconductors, semiconductor manufacturing equipment, telecommunications equipment, oscilloscopes, and other commodities.

In the National Defense Authorization Act for Fiscal Year 1998, Congress imposed several restrictions on the export of high performance computers to countries posing proliferation, diversion, or other security risks, including the PRC.