[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]
THE IMPACT OF U.S. EXPORT CONTROLS ON
NATIONAL SECURITY, SCIENCE AND
TECHNOLOGICAL LEADERSHIP
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JANUARY 15, 2010
__________
Serial No. 111-80
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
______
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COMMITTEE ON FOREIGN AFFAIRS
HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American CHRISTOPHER H. SMITH, New Jersey
Samoa DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey ELTON GALLEGLY, California
BRAD SHERMAN, California DANA ROHRABACHER, California
ELIOT L. ENGEL, New York DONALD A. MANZULLO, Illinois
BILL DELAHUNT, Massachusetts EDWARD R. ROYCE, California
GREGORY W. MEEKS, New York RON PAUL, Texas
DIANE E. WATSON, California JEFF FLAKE, Arizona
RUSS CARNAHAN, Missouri MIKE PENCE, Indiana
ALBIO SIRES, New Jersey JOE WILSON, South Carolina
GERALD E. CONNOLLY, Virginia JOHN BOOZMAN, Arkansas
MICHAEL E. McMAHON, New York J. GRESHAM BARRETT, South Carolina
JOHN S. TANNER, Tennessee CONNIE MACK, Florida
GENE GREEN, Texas JEFF FORTENBERRY, Nebraska
LYNN WOOLSEY, California MICHAEL T. McCAUL, Texas
SHEILA JACKSON LEE, Texas TED POE, Texas
BARBARA LEE, California BOB INGLIS, South Carolina
SHELLEY BERKLEY, Nevada GUS BILIRAKIS, Florida
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
VACANTWexler leaves 1/4/
10 deg.
Richard J. Kessler, Staff Director
Yleem Poblete, Republican Staff Director
Edmund Rice, Senior Professional Staff Member
Riley Moore, Deputy Clerk
C O N T E N T S
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Page
WITNESSES
John L. Hennessy, Ph.D., President, Stanford University and Co-
Chairman, Committee on Science, Security and Prosperity,
National Research Council...................................... 12
William C. Potter, Ph.D., Director, James Martin Center for
Nonproliferation Studies, Monterey Institute of International
Studies........................................................ 26
Ms. Karen Murphy, Senior Director, Trade, Applied Materials, Inc. 43
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Dana Rohrabacher, a Representative in Congress from
the State of California: Excerpt from pages 66-69 of the 2009
U.S.-China Security and Economic Review Commission Report...... 5
John L. Hennessy, Ph.D.: Prepared statement...................... 16
William C. Potter, Ph.D.: Prepared statement..................... 31
Ms. Karen Murphy: Prepared statement............................. 46
APPENDIX
Hearing notice................................................... 70
Hearing minutes.................................................. 71
The Honorable Howard L. Berman, a Representative in Congress from
the State of California, and Chairman, Committee on Foreign
Affairs: Prepared statement.................................... 72
THE IMPACT OF U.S. EXPORT CONTROLS ON NATIONAL SECURITY, SCIENCE AND
TECHNOLOGICAL LEADERSHIP
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FRIDAY, JANUARY 15, 2010
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:30 a.m., at
Stanford University, Arrillaga Alumni Center, First Floor, 326
Galvez Street, Palo Alto, California, Hon. Howard L. Berman
(chairman of the committee) presiding.
Chairman Berman. To everyone, good morning. And to those
who may be watching these proceedings in Washington via the
Internet, good afternoon.
Today's hearing is on the impact of U.S. export controls on
our Nation's national security and on deg.our
leadership in science and technology. We are holding it here in
Silicon Valley because no State is more heavily affected by
export controls than California--with our cutting-edge high
technology industry, academic institutions and scientific and
research establishments--and no region of the State has more
experience with such controls than this one.
We are very grateful to Stanford University--and most
especially to Dr. Hennessy, one of our witnesses--for hosting
these proceedings and for all of the technical and logistical
support they provide to make this day possible.
For the benefit of the people who are new to the subject,
let's start with defining our terms. Through export controls,
the Federal Government restricts the international transfer of
what are called ``dual-use'' technologies--those that have
legitimate civilian uses but also can be used for military
purposes. This is a critical aspect of our national security
policy.
But there is a growing consensus among security experts as
well as academics and industry leaders that our current system
of export controls needs to be updated in order to continue
protecting sensitive technologies while also maintaining U.S.
technological leadership.
So this hearing serves at least two related purposes. The
testimony will help our committee prepare for a complete
revision of the statute that authorizes our system of licensing
and controlling dual-use technologies. And what we learn today
will contribute to congressional oversight of the export
control policy review that President Obama has ordered, and
that is now underway.
Joining us on the dais today is a valued member of the
committee for many years, Dana Rohrabacher from Southern
California, who brings both a background and deep interest in
national security issues but also many years of experience on
the Science and Technology Committee in the House and a great
interest in those issues as well; and Zoe Lofgren, who is the
chair of the California Democratic congressional delegation and
certainly familiar to people from this particular area and who,
in fact, I remember back--it seems like 8 or 10 years ago--
being heavily engaged in one aspect of this in the encryption
issue; and Anna Eshoo, in whose district Stanford University is
located and who is chair of the Intelligence Community
Management Subcommittee of the House Permanent Select Committee
on Intelligence, as well as many other things. So great
interest and background for all of the people who are on the
panel today.
While neither Zoe nor Anna are members of the Foreign
Affairs Committee, they are highly interested in the issue. And
given the nature of this as a field hearing, I have invited
them to participate as if they were members of the committee.
Export controls don't get a lot of public or media
attention. They have been an important part of the U.S.
national security establishment since 1949, when our current
control system began as a part of NATO.
Here in California, many of our 61,000 exporting firms,
such as Applied Materials in Santa Clara, and an increasing
number of our academic and research establishments, such as
Stanford, have significant compliance responsibilities.
You practically have to have a Ph.D., or a law degree--or
maybe both--in order not to run afoul of deg.the
increasingly complex U.S. export control regimes. The
regulations now fill more than 2,000 pages. There are frequent
changes--two dozen were announced last year alone. More than
2,600 items and technologies are subject to controls, just in
the dual-use area.
Exporters and universities are required to check six
separate lists of potentially dangerous individuals and groups,
with thousands of entries, before allowing access to controlled
goods and technological information.
In many cases, government approval is required, and the
growth rate in applications and approvals of licenses is
phenomenal: 21,000 licenses were issued in 2008; double the
number from 10 years ago.
Universities and other research institutions face a
particular set of compliance challenges, as the U.S. moves to
broaden and tighten the rules governing access by foreign
students and researchers to science laboratories and research
facilities.
These rules, aimed at regulating the transfer of
technological knowledge--as opposed to goods--increasingly are
affecting our high-tech companies as well.
Moreover, the worldwide diffusion of sensitive goods and
technological knowledge has a significant impact on national
security. These are the same technologies that drive scientific
advances and commercial progress.
Examples: Thermal imaging cameras are being used in the
latest collision avoidance systems for vehicles, while
remaining a key advantage for our forces on the battlefield;
encryption is an important defense for individuals, companies
and governments against cyberwarfare and cybercrime--this has
been in the news lately--while at the same time shielding
communications among terrorists from interception by law
enforcement authorities; commercial software reportedly is
being used to defeat our unmanned drones in Afghanistan;
bioengineering and nanotechnology carry the promise of
prolonging life and curing disease, but can also be turned to
designing a new generation of bioweapons. These are just four
examples; there are countless others.
This area of public policy raises complex questions--and
there are no easy answers. Clearly, our national security
requires a continued effort to prevent our adversaries from
misusing the benefits of science and industry against us and
our allies.
But just as clearly, we need to refine and update our
export control policy and attendant regulations to sustain
America's leadership in scientific research and discovery, and
technology-driven industry. That, too, is part of protecting
our national security.
Our committee, the Foreign Affairs Committee, is beginning
the process of trying to enact a new statute to be the
foundation in this area for U.S. policy. And today's hearing is
in some ways the first formal step in that process.
I now would like to yield to my friend and colleague from
the committee, Mr. Rohrabacher, for any opening comments he may
wish to make.
Mr. Rohrabacher. Thank you very much, Mr. Chairman. And,
although there seems to have been a snafu caused by the holiday
and communication between the Republican staff and the
Democratic staff, I am sure that that will be corrected and
more care will be taken. But I am very pleased to be here today
to represent the Republican side of this issue. Although this
is an issue that doesn't have, really, Republican and Democrat
sides, it basically is an issue among all of us Americans about
what standards we are going to have.
So it is appropriate we have a hearing on export control
here in Palo Alto, which, of course, has been the seed bed for
technological innovation in our country. No doubt we hold this
hearing for the reason that current export control regime
regulations are a serious impediment to much of the work that
is being done here.
Let me state at the outset that I support export control
reform. I support streamlining the system. I support removing
barriers that hamstring U.S. companies. However, this reform
needs to reflect the fact that there are nations who seek to do
harm to both our national well-being and as far as our economic
security as well.
There are nations that are controlled by repressive and
dictatorial governments which are hostile to the United States
and to the democratic ideals that we represent. These nations
should not benefit from any reform of U.S. export control laws.
I strongly believe in free trade between free people, but
trade with dictatorships almost by definition is trade that is
manipulated, at least on one side of the equation. That would
mean that it might end up being harmful to the United States
economically as these repressive regimes manipulate the rules
of the game on their end of the equation so that it helps their
economy as compared to mutually beneficial trade, but also they
manipulate it in a way in which they can receive the benefits
of technological research that has taken place in the United
States and now will be put to use benefitting not only their
economy but their military power as well.
I strongly support, then, a two-tiered system that rewards
our allies and other democratic countries while keeping
dictatorships and other rogue regimes at arm's length.
I would like to place in the record at this point some
information from U.S. economic China report and studied review
by commission report that was frequently issued, which talks
about how China, in particular, has manipulated our trade and
gotten their hands on technology and has been abusive to some
of the standards that we would think are essential to providing
guarantees that our country is not hurt by such trade.
Chairman Berman. Without objection, that will be included
in the record.
[The information referred to follows:]Rohrbacher
FTR deg.
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Mr. Rohrabacher. Thank you. It will be part of my statement
here.
The bottom line is that if you export to what seems to be
an innocuous civilian entity in places like China, you are
essentially exporting U.S. technology straight into the hands
of the Chinese military. And we have learned that lesson
before, Mr. Chairman.
We learned it the hard way in the 1990s when China received
rocket design information from U.S. companies and that there
was a transfer of technology that allowed China to perfect its
missile technology.
Now, just last week the Chinese demonstrated an anti-
missile system. We have to conclude that their ability to do
this was probably helped back 15 years ago by U.S. companies.
That's a travesty.
We are trying to reform the system to make trade with
technology products easier among democratic nations. We must
make sure that we do nothing that is going to help the Chinese
build better rockets or build rockets that can shoot down our
rockets.
Today we want to make sure that, for example, one of the
issues that confronts us today is whether or not we are going
to make our satellite companies more competitive by legislation
that will permit them to launch their satellites on Chinese
rockets. We should have learned our lesson 15 years ago when
our national security was severely compromised by this very
same policy.
Let me finish by saying that while companies at Silicon
Valley stand perhaps the most to gain from export control
reforms, they also stand the most to lose if we don't do export
controls right because while so much is developed here at the
cost of so many invested dollars and also the investment of the
genius of our people who work here, if indeed we end up with
laws that are so lax that our competitors or the competitors of
these people end up with this technology, we are doing not our
Nation a disservice, but we are doing the high tech industries
here in this area a disservice.
And, finally, Mr. Chairman, it is fitting that we hold this
meeting today considering that yesterday Google announced that
it may be closing shop in China. Let me just note that by doing
this, Google has demonstrated a very high standard, its
patriotism, its high standards, commitment to ideals.
Unfortunately, that does not reflect the same commitment from
many people who head our corporations in the United States of
America.
I would say to the President of Google--and I sent him a
letter yesterday commending him as a moral giant, as compared
to some of the moral pygmies that we have seen in other
industries anxious to make short-term profit.
So today as we discuss this, let's keep that in mind. And,
again, I would use this forum to applaud the high standards of
patriotism and morality that the leaders of Google and I would
hope that the rest of our technological leaders would follow
their example.
Thank you very much, Mr. Chairman.
Chairman Berman. Thank you, Mr. Rohrabacher.
Congresswoman Eshoo?
Ms. Eshoo. Thank you. And good morning, Mr. Chairman, and
welcome to not only Stanford but to the 14th congressional
district, which I am so proud and privileged to represent to
Congressman Rohrabacher.
Thank you for being here. You two honor us with your
presence here and, of course, to my partner and outstanding
friend, Congresswoman Zoe Lofgren, who has distinguished
herself on these issues over the years. We have a great sense
of pride about our relationship because we like to think that
in her district, that there are two Members of Congress that
work for them. And I know that there are two who work for my
constituents because she is my partner.
It is so important, Mr. Chairman, to hold this hearing
about potential legislative action to amend the Export
Administration Act because of who and what we have here. Your
leadership on this issue is vital to the future of our Nation's
technology sector. And this hearing comes, as has been noted,
at a very critical time in America's history.
Your decision to overhaul the current law will finally
update a system plagued by restrictive relics. How we deal with
this issue will help determine our future as either a global
leader in innovation or a nation that sacrificed our economic
future at the altar of inefficient, outdated, and unnecessary
security options.
I commend your decision to jump start a debate that has
been waiting so long for an effective champion. And a champion
you are. We should all note that Howard Berman, Congressman
Berman, is one of the most respected members of not only the
House but the entire Congress. His knowledge of the issues that
he takes on, no one really matches his knowledge. And so when I
say an effective champion, I couldn't mean it more.
Anything approaching a complete overhaul of this legal
framework was last completed, imagine this, during the Carter
administration. At that time, no one could have foreseen
laptops on every desk and phones in everyone's hip pocket. Some
here recall using a typewriter at that time. I certainly do.
[Laughter.]
I was really good at it. Spell check meant using Webster's
Dictionary. And we considered a calculator to be the epitome of
technological innovation. We chuckle now, but that is when this
issue was really last seriously addressed. Computers were
mostly relegated to the most very progressive office
environments.
So obviously the world has changed. And our policies must
as well if we are going to survive as a player in the current
worldwide marketplace. There is a saying, ``Adapt or perish.''
It is that simple.
So with your leadership, Chairman Berman, we will quickly
fast forward away from the Cold War era export control policies
that still linger today. As we initiate this revision, we need
to make certain that our legislative efforts actually
accomplish our goals.
At the most basic level, the export control debate
represents the age-old tension between commercial and national
security concerns. I identify with many of the things that
Congressman Rohrabacher said. I have a serious and longstanding
appreciation for the need to balance national security concerns
with international competitiveness.
As the chairman said, I not only serve as a member of the
House Energy and Commerce Committee but also the House
Intelligence Committee. So we have to address both concerns.
And I believe that we can, we should, and we will.
I am committed to safeguarding our borders, whether they're
virtual or physical, but this security has to be smart. It has
to be strategic and not a knee-jerk reaction to individual
incidents.
Most of all, our policies and our laws should serve as an
actual national security purpose and not put restrictions on
exports of products that are already widely available.
This past week, as Congressman Rohrabacher stated, we were
reminded of the importance of these industries, their integral
relationship to daily life, and the bull's-eye placed on them
by outside forced intent on theft and vandalism. When that
vandalism takes place, I might add, it is the hijacking of
American genius, intellectual property, and all that goes with
it.
The massive cyberattack on Google and as many as 20 other
companies should serve as a reminder that we have to safeguard
our cyber resources. At the same time, we have to keep our
competitive edge.
Decontrolling encryption products and making them more
widely available globally will work to ensure that our data is
protected and that the victims of attacks will be protected in
the future.
Policy decisions, such as decontrolling encryption and
revising export control regulations, also will advance the
competitive position of our country and its companies in the
global marketplace. This is another reason that fear cannot
drive commercial and security policies.
So it is fitting that we are here, both at Stanford, which
is in the heart of Silicon Valley. No region of the country is
more heavily affected by export controls on technology. Our
research institutions and cutting-edge technology companies
play key roles in this discussion.
And a special thanks to President John Hennessy for not
only hosting us but for being a witness here today, to Dr.
Potter, to Ms. Murphy, thank you for being willing to cast
light on this issue. Congressional hearings are amongst the
most important things that Members of Congress undertake.
Without the hearings, without the expertise of those that bring
forward information, we really cannot shape the kinds of
policies that are befitting of our great country.
So, Mr. Chairman, thank you once again for your leadership
and for the courage for taking this on because it is a heavy
lift, but it is a lift that we really must take on so that we
can allow American technology companies to compete on a level
playing field with their foreign competitors while retaining
the essential safeguards to keep our Nation and our innovative
economic assets secure.
So thank you very, very much. And thank you to everyone
that is in the audience as well.
Chairman Berman. Thank you very much. And thank you for the
very kind comments.
Ms. Lofgren?
Ms. Lofgren. Thank you, Mr. Chairman. And thank you for
coming once again to the Silicon Valley. You have come here in
the past on patent issues and other intellectual property
issues. And we know of your commitment to make sure that the
export control scheme that we have serves America well.
This, as you have mentioned, is something that has been of
great interest to me for many years. As has been mentioned, the
export control scheme was really devised during the Cold War.
And certainly the economy that we have today is quite different
than at that time with information moving globally, the pace of
technological change astronomically faster, even in the
military arena with the civilian production of material, as
compared to during the Cold War.
So it is important that as we look at renewing the system,
that we make sure that the controls are not over-broad, that
they are not over-complicated, and that they are necessary. As
we move forward, I know that we will be looking at what is in
America's best interest as we control the export of material.
As you know, I chair the Immigration Subcommittee in the
House Judiciary Committee. And so I want to touch on something
that many people don't even know about, and that is something
called deemed exports. When I mention that, people go ``What
the heck is that?''
Well, a deemed export is essentially sharing information
with a citizen of another country. And if that information is
controlled, it's not classified but controlled. Then there are
prohibitions.
That is very problematic when it comes to a university
setting. And I hope that Dr. Hennessy will mention it here,
especially when you look at our wonderful advantage in American
higher education by getting bright students from all across the
world who come here and then want to stay here.
If you take a look, for example, according to the United
States Department of Education, in engineering, 42 percent of
master's students and 64 percent of Ph.D. students in American
universities are nonresident aliens. In computer and
information sciences, 39 percent of master's students, 61
percent of Ph.D. students are non-resident aliens.
According to the National Science Foundation, of all
science and engineering doctorate recipients, 43 percent were
non-U.S. citizens. Specifically non-U.S. citizens comprised 64
percent of Ph.D. graduates in computer science, 67 percent of
Ph.D. graduates in engineering, 57 percent of Ph.D. graduates
in math, and 51 percent of Ph.D. graduates in the physical
sciences. And here at Stanford, more than 50 percent of the
engineering and physical science Ph.D. students are foreign
nationals.
Now, certainly the vast majority of these graduate students
wish to stay and become Americans here with us. And I am
hopeful that as we move forward in this Congress, we will come
up with a sensible way to allow the best and the brightest in
the world who want to become Americans and stay here and throw
in their lot with us to more easily do that.
At any university setting, to prohibit science, basic
science research, to half of your graduate students is a
terrific impediment to the advance of basic science. And we
have to come up with some solutions to this question.
I remember a number of years ago, I was visiting the
science departments in Berkeley, our competitor, and they
talked about a science study measuring waves from the sun. It
was on a satellite, but it had nothing to do with satellite
technology and that because it was launched, the foreign
students from France and from Germany and Asia couldn't work on
the basic science.
That really impedes the advance of knowledge. It doesn't
help the Untied States in any way. So I am hopeful that we can
update these rules and make sure that America is number one and
stays number one when it comes to science research.
And I thank you, Mr. Chairman, for being here and Stanford
for hosting us.
Chairman Berman. Thank you very much, Zoe. And I think
President Hennessy's prepared testimony gets into a few of
those issues as well.
We are done for a while. [Laughter.]
The reason we came here was to hear you. President
Hennessy, again, thank you very much. And I want to thank all
of the staff, both of the university and of our committee. It
is not such an easy job to set up one of these things in a
field hearing context. And Ed Rice and everybody else who
worked on this, I am very grateful for their help.
Dr. Hennessy?
STATEMENT OF JOHN L. HENNESSY, PH.D., PRESIDENT, STANFORD
UNIVERSITY AND CO-CHAIRMAN, COMMITTEE ON SCIENCE, SECURITY AND
PROSPERITY, NATIONAL RESEARCH COUNCIL
Mr. Hennessy. Thank you, Mr. Chairman. And thank you all
for coming today to talk about this important issue. We
appreciate your interest.
As you all know, I am President of Stanford University. And
I also served as the co-chair with General Scowcroft of the
National Academy's Committee on Science, Security, and
Prosperity, which last year released the report, ``Beyond
Fortress America: National Security Controls on Science and
Technology in a Globalized World.''
Although I will reference the committee's findings in my
remarks today, I speak on behalf of the higher education and
scientific research community, rather than as a representative
of the committee or the academy.
It has become a broadly accepted principle that United
States leadership in science and technology is crucial, both to
our national security and our country's economic prosperity.
What is less well-understood, however, is how dramatically the
conduct of science and the technology has changed over the past
two decades.
In this new century, the conduct of science takes place in
a highly collaborative and geographically distributed research
community. Thirty years ago, the United States dominated in
many fields of science and technology. Today, the United States
is still the overall leader. But in many fields, we are one of
the leaders, rather than the sole leader. And in a few fields,
including things such as flat panel displays, semiconductor
memory, and advanced battery technologies, the United States
is, arguably, not at the top.
Consider the source of papers published over the past 25
years by the American Physical Society. As you will see in the
handout we attached to my written testimony, the trend is
clear. The rate of publication among physicists outside of the
United States and Western Europe has increased at an
astonishing rate.
In the coming decades, remaining a leader requires that we
fully participate in the international research community. To
do so requires that unclassified information be able to flow
among researchers and industry leaders in the various fields.
And it requires the United States to continue to attract the
best and brightest minds from around the world to work in our
laboratories.
There is absolutely no question that the U.S. needs export
controls to maintain military advantage on the battlefield and
to sustain the homeland. However, as advances in science and
technology have transformed our world and our ways of
conducting research, many of the export control regulations
that served the United States well 40 years ago no longer met
the country's needs. The current system actually impedes our
national security and thwarts our ability to compete.
Leadership in science and technology begins with attracting
the best minds. We have a long and rich tradition of doing so.
The United States Twentieth Century dominance in science and
technology owes much to immigrants, such as Nikola Tesla,
Albert Einstein, Edward Teller, Enrico Fermi, and An Wang.
Indeed, Intel, Google, Yahoo!, and Sun Microsystems, as well as
an estimated 52 percent of the Silicon Valley start-ups have
one or more founders who were born outside of the United
States.
At Stanford, we attract leading researchers and faculty
from around the world. And, as Congresswoman Lofgren mentioned,
more than half of our Ph.D. students in the physical sciences
and engineering come from outside the United States.
As a matter of policy, we do not engage in classified
research. That would limit participation of any of our students
or faculty on the basis of citizenship. Our focus is on
fundamental research, which, by its very nature, is intended to
be open to all and freely communicated.
Nonetheless, current export controls and related security
measures have caused us great difficulties. For example, in the
gravity probe B project, we see a situation similar to the one
mentioned by Congresswoman Lofgren. A satellite launches the
gravity probe project, but the instrument itself is a space
telescope designed to test Einstein's theory of relativity. The
design and the fabrication were basic research, and the
technical details were openly published. It doesn't have a
strategic use, but it happens to be on a satellite.
Because of ITARs, the international traffic and arms
regulations, satellites are treated as munitions. Stanford
researchers cannot share information about the particular
design with foreign nationals. That limits our ability to
publish about the design and to ensure that our colleagues
accept and believe the results from the measurements. It also
limits us with respect to deemed export as well, which requires
us to monitor how that information might be shared with
students here on our campus.
In another example, a U.S.-based Fortune 100 high tech
company was given a DARPA contract to build a microchip that
will attempt to simulate the human brain based on what we know
about its electrical properties, clearly basic research.
A team from Stanford consisting of a faculty leader who is
a U.S. citizen and a half-dozen students, some of whom come
from the United States, but two are also from China, were
proposed to collaborate on the project. But after the project
began, we learned that the use of export control technology was
central to the work. For the Stanford team to participate, our
Chinese students would have to be excluded.
Stanford does not, nor will it, restrict participation of
students on the basis of citizenship. Since the export control
technology was deemed central to the project, the Stanford
research team involvement and the benefit of their
contributions have been greatly reduced.
A closely related problem was encountered in the area of
biosecurity. Professor Stanley Falkow, one of the world's most
distinguished researchers in the area of microbial
pathogenesis, had been working on a non-pathogenic version of
plague, a version that is actually used in the construction of
the vaccine. After the USA PATRIOT Act, this organism was
designated as a select agent, requiring greatly enhanced
security and background checks on lab personnel.
Falkow viewed this as incompatible with his research
approach. He ended up destroying the organism and stopped
working in the area. The result was clearly a net loss for our
country.
In these examples, our Nation can lose multiple times. We
lose the benefits of the research. We lose senior faculty
leadership in a field. And we reduce our ability to engage and
retain young researchers.
As these examples illustrate, the negative impacts of
control regulations can lead to a loss of scientific leadership
and a reduction in our Nation's security.
Our goal should be to design national security controls
without negatively impacting our ability to conduct fundamental
research that can benefit the United States economically and
militarily.
The growing trend to label fundamental research as
``sensitive but unclassified'' is a deep concern, since it
would further blur the lines between controlled and
uncontrolled research in an unpredictable fashion. There are
policies in place that can serve as a straightforward and
rational interpretation of export controls.
Through national security decision directive 189, for
example, government agencies with concerns about work could
specify restrictions when they issue the contract, including,
when appropriate and necessary, classifying the work.
Maintaining the openness of basic research as clearly intended
in NSDD-189 is crucially important for the long-term health of
U.S. academic research.
Export controls are a challenging and complex topic, and I
am very pleased that this committee has undertaken this
important task of examining them and considering the need for
reform, which in the view of many is long overdue.
As you move forward, if there is any way my colleagues in
higher education and the scientific community can assist you,
we would be honored to do so. Thank you, Mr. Chairman.
[The prepared statement of Mr. Hennessy
follows:]John Hennessy deg.
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Chairman Berman. Thank you, Dr. Hennessy.
And, of course, I did proceed with your testimony without
the introduction I was supposed to make of you regarding your
background. I think it is probably known to most, but let me
just for anyone who doesn't know remind people that, in
addition to being the President of Stanford University, Dr.
Hennessy started his career here as a professor of electrical
engineering, chaired the Computer Science Department, served as
the Dean of the School of Engineering, University Provost until
now as President. And then in the information technology field,
he is known internationally for his research and development of
a revolutionary computer architecture. To this day, he
continues his research in high-performing computing and as a
co-founder of the MIPS Computer Systems, a cutting-edge
developer of microprocessors.
And, most importantly for purposes of today's testimony, he
is co-chair of the Committee on Science, Security, and
Prosperity of the National Research Council, which has a number
of national security science and industry leaders.
The committee issued a report last spring on national
security controls, on science and technology. And that report
was part of what got us to focus on moving ahead with our own
project in this area.
Dr. William Potter is our next witness. Here the
introduction will come before the testimony. [Laughter.] He is
Director of the James Martin Center for Nonproliferation
Studies at the Monterey Institute for International Studies.
Dr. Potter is one of the nation's leading experts on
nonproliferation, arms control, technology transfer, and
security.
Twenty years ago he founded the Center for Nonproliferation
Studies at the Monterey Institute. Under his direction, the
center, now known as the James Martin Center, has become a
recognized leader in the research and scholarship and the
national security field.
Dr. Potter continues his academic work as the Sam Nunn and
Richard Lugar Professor of Nonproliferation Studies at the
institute. He has written extensively on security issues,
including his latest book, ``The Global Politics of
Combatt deg.ing Nuclear Terrorism.''
I have personally known and worked with Bill for many
years. His institute does a very important job, I think, for
our country and for the world in terms of the expertise and the
people that it produces to work in this critical field. And he
is well-prepared to give us expert advice on the security
issues to be considered in updating and strengthening our
export control system.
I will now also introduce Karen Murphy. And then we can go
right to both of your testimonies. She is Senior Director for
Trade at Applies Materials located in Santa Clara.
Ms. Murphy is responsible for export control compliance and
other trade issues for this cutting-edge leader in
nanotechnology, semiconductor manufacturing, and related
fields. She has wide experience in the practical aspects of
import and export, including as a licensed U.S. Customs broker.
In recognition of her expertise, she serves on the Commerce
Department's Advisory Committee on Export Control Regulations
and has served on the Export Control Subcommittee of the
President's Export Council. We are pleased to have you with us
today.
Dr. Potter, why don't you go ahead?
STATEMENT OF WILLIAM C. POTTER, PH.D., DIRECTOR, JAMES MARTIN
CENTER FOR NONPROLIFERATION STUDIES, MONTEREY INSTITUTE OF
INTERNATIONAL STUDIES
Mr. Potter. Thank you. It is my honor and great pleasure to
speak at the field hearing of the Committee on Foreign Affairs.
I think the subject is very timely and important, and I applaud
the committee and Chairman Berman for undertaking this
initiative. It also is always a pleasure to return to Stanford,
where I spent a wonderful time as a postdoctoral fellow many,
many years ago.
By way of introduction and as a caveat, I wish to emphasize
that while the center I direct covers the entire range of
weapons of mass destruction and their delivery systems, my own
expertise lies primarily in the nuclear sector and issues
associated with illicit nuclear trafficking and the dangers
posed by nuclear terrorism. And, as such, my remarks will
emphasize these areas.
I also want to note that my remarks this morning constitute
a much abbreviated version of my written testimony, which I
have provided to the committee.
A number of recent studies, including the important NRC
Council report, on the deg.``Beyond Fortress
America,'' have correctly observed that many U.S. export
controls developed during the Cold War are ill-suited to meet
today's national security challenges.
It is also the case that in an increasingly globalized
world, one must be very cautious about imposing restrictions on
the flow of information, technology, and scientists in the name
of national security without very carefully weighing the costs
and benefits of such action. It would be equally shortsighted,
however, for the United States to abandon prudent export
controls on dual-use technologies and materials directly
relevant to nuclear, chemical, and biological weapons in the
name of economic competitiveness on the grounds that some other
states have failed to adopt stringent export controls.
Similarly, it would be most unfortunate from the standpoint
of weapons of mass destruction proliferation were the United
States to signal its diminished support for adherence to the
export control guidelines of existing international
nonproliferation regimes, based on the premise that some states
have already disregarded inconvenient nonproliferation export
control norms and practices.
Unfortunately, one can point to recent examples of both
outmoded U.S. and international approaches to export controls
and changes to export policy that have been detrimental to U.S.
national security.
Illustrative of the problem of outmoded U.S. export
controls are current nonimmigrant visa regulations that make it
difficult for credentialed academic researchers to work with
U.S.-based colleagues and for international students with
advanced degrees in the science and engineering sectors to
extend their stays in the United States for employment
purposes. And here I fully endorse the NRC's recommendations
with respect to remedies in this sphere, but I also would note
the need for more nonproliferation education and training in
U.S. industry and academe.
Greater self-awareness and self-regulation regarding the
security and export of WMD-related material, technology, and
know-how may be the best antidote to more intrusive government
controls.
Regrettably, it is also the case that U.S. national
security was impaired when in the name of economic
competitiveness and in pursuit of a new strategic partnership
with India the United States gutted important components of its
own domestic export control laws and led the charge to exempt
one country from the export guidelines of the Nuclear Suppliers
Group.
A similarly ill-considered congressional initiative in 2005
to make it easier to export highly enriched uranium to U.S.
allies, promoted in the name of economics and medical
necessity, directly undermined U.S. efforts to persuade other
countries to combat nuclear terrorism by minimizing the use of
highly enriched uranium in the civilian nuclear sector.
My point is not to contest the desirability of reviewing
and, where appropriate, revising export policies to reflect new
realities. I fully endorse such a general approach. It is
essential, however, to guard against changes in those U.S.
export controls that have served us well in curbing the spread
of WMD and whose abandonment might inadvertently contribute to
the proliferation of nuclear, chemical, and biological weapons.
Therefore, in thinking about where possible reform of
export control regulations should be pursued, it may make sense
to distinguish between export controls targeting WMD-relevant
items and those directed at the much larger body of dual-use
strategic goods unrelated to weapons of mass destruction.
Moreover, it is important to recognize that to the extent
that the United States wishes other states to attach greater
priority to the development and implementation of domestic
nonproliferation export controls, as is required by U.N.
Security Council Resolution 1540, it must lead by example.
I will leave it to leaders from industry and science to
depict the shortcomings of the current U.S. export control
system as they pertain to economic competitiveness and the
unfettered exchange of ideas and information.
What I would like to highlight in my remarks this morning
are several new nonproliferation realities and how associated
WMD proliferation risks are compounded by gaps and weaknesses
in the U.S. export control system and related international
controls. I will then conclude with a few specific
recommendations about what might be done to improve the
situation.
Although the post-Cold War international environment has
reduced the risks of a superpower nuclear exchange, it also has
contributed to the growth of new challenges involving the
spread and potential use of weapons of mass destruction. These
challenges include the tendency on the part of many states to
subordinate nonproliferation considerations to economic and
political interests, the development of a global black market
in sensitive dual-use technology and material related to the
production and delivery of weapons of mass destruction, and the
rise of non-state actors as nuclear suppliers, middlemen, and
end users.
Although discussions of nuclear terrorism typically focus
on the potential use by non-state actors of nuclear explosives,
it is important to recognize the proliferation risks posed by
non-state actors as suppliers of nuclear material, technology,
know-how, weapons design, and conceivably the weapons
themselves.
The extensive nuclear supplier network masterminded by
Pakistani scientist A. Q. Khan is illustrative of this
proliferation challenge. An analytically distinct but variant
of this threat is the operation of non-state actors as
middlemen, connecting nuclear suppliers, both state and non-
state entities, with end users, which also might be either
state or non-state actors.
Most available information indicates that Dr. Khan was the
entrepreneur behind the emergence of what former IAEA Director
General Mohamed El-Baradei has called a ``nuclear weapons Wal-
Mart.''
Nevertheless, one should take care not to equate that
international network with one individual or to assume that his
enforced retirement has put illicit non-state nuclear suppliers
out of business. Indeed, the so-called Khan network was
relatively non-hierarchical and involved international
leadership that was widely dispersed around the globe,
including locations in Europe, Dubai, South Africa, and
Malaysia. Few of its members were ever prosecuted, and even
fewer were convicted and served prison terms.
It is to be expected that middlemen seeking business in
brokering illicit nuclear trade will gravitate toward bases of
operations in states with weak or nonexistent export control
regulations and underdeveloped enforcement mechanisms.
Unfortunately, these traits are not limited to the
developing world. Indeed, one is hard-pressed to find examples
anywhere of successful prosecutions of illicit nuclear
trafficking in which the accused received more than a slap on
the wrist, leading some to conclude that there are greater
penalties for driving under the influence in most countries
than for driving with illicit nuclear goods.
The NRC study, among other reports, catalogues a long list
of shortcomings in the current U.S. system of dual-use exports,
most of which pertain primarily to controls outside of the
narrow area of WMD-related commodities.
In my written testimony, I call attention to a number of
those that do have relevance to the WMD sphere, including a
cumbersome bureaucratic structure, morale problems among
Customs inspectors and investigators, and the challenge of
devising effective export controls in areas where new
technologies are emerging most rapidly.
Here I would only emphasize that the logic of adjusting
export controls to changing conditions should not mean simply
relaxing or reducing controls. In some instances, it may be
necessary to introduce more sophisticated and tailored
approaches that are more effective as well as simply more
efficient.
To be sure, one can identify significant shortcomings in
both the design and performance of the major export control
regimes internationally: The Nuclear Suppliers Group, the
Missile Technology Control Regime, the Australia Group, and the
Wassenaar Arrangement.
These deficiencies include non-membership of some key
exporting countries, inconsistent implementation of catch-all
and no-undercut provisions, inadequate reporting and
intelligence sharing practices among member states, and a lack
of familiarity by industry in member states of the provisions
governing exports. These problems, however, should not obscure
the very useful contribution to WMD nonproliferation made by
the NSG, the MTCR, and the Australia Group.
It also should be noted that these nonproliferation regimes
were not driven primarily by Cold War considerations or
attempts to stymie the Soviet Union's quest for weapons of mass
destruction.
Indeed, in the nuclear sector during much of the Cold War,
the United States and the Soviet Union pursued remarkably
similar nuclear export control and nonproliferation policies.
And, in fact, Washington often found it easier to cooperate
closely with Moscow on nuclear nonproliferation and export
control issues than it did with some of its close allies. As
such, I would argue, it does not follow logically that these
export control arrangements should be scrapped or substantially
modified simply because the Cold War has ended.
As one contemplates reforms for the U.S. export control
system, one must be aware of the liabilities that result from
divergent international practices and priorities as well as the
shortcomings of existing international export control regimes.
It is also the case, however, that many states do follow
the U.S. lead on nonproliferation export policy and that, by
and large, nonproliferation export control norms and practices
globally have become more prudent and widespread over time.
Although I would argue that the 2008 NSG exemption granted
to India marked a major step backward in the international
nuclear export control arena, it is all the more imperative to
strengthen the NSG and other international mechanisms that
focus on WMD proliferation.
A sound U.S. approach to nonproliferation export controls
requires in my mind a two-pronged approach: First, recognition
and retention of those aspects of the system that have
performed well; and, secondly, introduction of new features
that will enhance economic competitiveness and information and
technology flow without weakening the international
nonproliferation regime.
Let me conclude my prepared remarks by suggesting how these
dual objectives may be pursued in tandem. Whatever the United
States does, it must be very careful not to make matters worse
for WMD proliferation. This dictum cautions against acceptance
of the advice of those who would like to dilute or restrict
further the catch-all provision that specifies the dual-use
items or technologies not on the commerce control list may
still require an export license if the exporter has reason to
believe that the item is intended for the development,
production, or delivery of nuclear, biological, or chemical
weapons.
In fact,--and I think this is a particularly important
point--an increasing number of companies today have made
strides in incorporating the catch-all philosophy into their
internal compliance programs, and greater efforts should be
made to encourage the adoption of WMD nonproliferation
objectives as a component of corporate social responsibility
goals.
A major step forward in promoting WMD-related export
controls internationally was taken in April 2004 when the U.N.
Security Council adopted resolution 1540, which, among other
things, requires all U.N. member states to adopt and enforce
effective laws which prohibit non-state actors from acquiring
WMD, their delivery systems, and the materials needed to
produce them.
Although few states directly challenge this mandate, its
implementation has been undermined in many countries due to
lack of resources and poor understanding of the relevance of
the measure for their own security interests.
If U.N. Security Council resolution 1540 is to be effective
as an export control initiative, it will be necessary for the
United States to increase its support for regional and national
1540 training programs.
In the U.S., effective export control enforcement continues
to be hampered by the lack of sufficient personnel to undertake
proper end-use checks and aggressively pursue investigations of
suspected violations. It does little good, for example, to
identify new cases that merit investigation if one is unable to
assign trained personnel to conduct investigations at home and
abroad.
It is a necessary but not sufficient condition to adopt new
rules and regulations internationally with respect to WMD-
related exports. Equally important is the need to build a
global nonproliferation and security culture in which
government and industry officials, scientists, faculty, and
graduate students who work with dual use WMD-related technology
and materials in the nuclear, biological, and chemical fields
learn to appreciate the potential dangers posed by these items
and become familiar with the domestic and international
regulations governing their use.
I will conclude my remarks by touching on the issue of
nonproliferation export controls as it pertains to the
university environment. At a time when the great majority of
U.S. Government officials and politicians of different
political persuasions agree on the dangers posed by WMD
proliferation, it is surprising how limited the opportunities
are for students at all levels of education to acquire formal
training in the field.
In a very small way, the Monterey Institute of
International Studies is trying to address this knowledge gap
by offering a new master's degree program in nonproliferation
and terrorism studies, the first of its kind in the world. But
many more universities will need to follow suit if we are to
train the next generation of nonproliferation specialists or
even introduce our future leaders in government, science, and
industry to the subject.
One practical step to remedy the problem, at least in the
United States, would be to pass a National Nonproliferation
Education Act, perhaps modeled after the National Defense
Education Act or the National Security Education Act.
Such legislation, ideally funded by a one-time
appropriation of about $50 million, would provide up to 50
fellowships per year to graduate students to pursue advanced
multidisciplinary training in nonproliferation studies at the
universities of their choice.
An act of this sort would have the dual positive benefit of
attracting top-notch young talent to the field and encouraging
more universities to offer courses on nonproliferation issues,
including export controls, in order to attract tuition-paying
students.
While not a short-term solution to our current predicament,
this approach would help to create the next generation of
experts on whom the United States will rely to tackle
increasingly complex tasks of preventing the proliferation of
nuclear, biological, and chemical weapons of mass destruction.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Potter
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Chairman Berman. Thank you very much, Dr. Potter. You have
some very interesting ideas in there.
And, Ms. Murphy, we look forward to hearing from you.
STATEMENT OF MS. KAREN MURPHY, SENIOR DIRECTOR, TRADE, APPLIED
MATERIALS, INC.
Ms. Murphy. Okay. Mr. Chairman and members of the
committee, member of the committee, and distinguished guests,
again, I am Karen Murphy, the Senior Director for Trade at
Applied Materials. I thank you for holding this hearing on
export controls and for offering me the opportunity to testify
before you today.
Mr. Chairman, in addition, thank you for your editorial in
today's Mercury News. I particularly appreciated the comment on
how export controls get little media attention. Holding a
hearing in Silicon Valley is important because of the number of
companies who have experience with these regulations and are
located here.
I think the fact that the room is full of such
representatives is in support of this premise. And probably no
one in this room doubts the need for updating our export
control system.
Applied Materials is based here in the Silicon Valley. We
are a global leader in manufacturing equipment used to produce
computer chips, flat panel displays, and solar photovoltaic
cells. In our last fiscal year, our revenues were approximately
$5 billion, of which more than 80 percent came from sales
outside the United States. With so much of our business
overseas, we devote considerable resources to trade compliance
and welcome this opportunity to share our views.
An important concern, in addition to the comments around
the Cold War, is that current regulations were really written
around a business model that a company designed the product,
made the product, and sold the product to one end user. Over
the past 30 years, this model has evolved into a global supply
chain, including engineering collaboration over the Internet
and distribution partners located in countries close to our
customers.
Today I will focus my oral comments on principles we need
to keep in mind as we move forward on any export reform
legislation and eventually regulations. My written testimony
contains additional information you may find useful.
These principles are both U.S. national security and
economic competitiveness depend on a strong, technologically
advanced industrial base. R&D and technological innovation are
now global in nature. Control mechanisms must be cognizant of
and keep pace with advances in technology. Control regimes
should be premised on a cooperative effort between government
and industry. Export controls should be multilateral. And,
finally, the export control process should be clear and simple,
from its policy foundations to its execution and review.
We believe a modernized export control system built on
these principles would do a much better job of protecting U.S.
national security and facilitating our global competitiveness.
I would like to now spend a few moments describing how a
revamped system would affect Applied Materials. In every one of
our business segments, we face intense international
competition. In every business line, we are always looking for
ways to run faster than that competition.
This is why we spend more than $1 billion annually on
research and development. We look for scientific and
engineering talent wherever we can find it, but being able to
hire and retain this brain power is often difficult and
sometimes impossible.
In physical terms, we perform research and development,
both inside and outside the U.S. And, again, flexibility is
essential if we are going to outrun our foreign competitors.
Another tool we use to stay competitive is through our
global supply chain. In short, everything about our business,
employees; facilities; suppliers; and our customers; and, of
course, our competitors, are globalized. We need a system that
recognizes this.
An effective control system should also be able to respond
to technological changes. Our current system falls short,
resulting in too many controls on technologies that are readily
available from outside the United States.
For example, one of our tools is an etch system, which is
used to create nano-scale circuits. We have a competitor in
China that is proving technically competent and is making gains
in the marketplace. It is also important to note that there are
no U.S. etch tools, whether from our company or our U.S.
competitor, installed at the leading U.S. manufacturer of
semiconductor devices.
Our control lists are woefully outdated. And any updates to
the Wassenaar control list take far to long to implement--that
it is important to note that at the world's leading-edge
manufacturer of semiconductor devices, there are no U.S. etch
semiconductor pieces of equipment at that factory.
Chairman Berman. Because of controls?
Ms. Murphy. No. Yes. No. [Laughter.]
Capability. What I am trying to say is the capability of
the foreign equipment is clearly catching up, has caught up
with the U.S.
Chairman Berman. Got it.
Ms. Murphy. So here is another example. We have a
competitor in China who makes similar semiconductor equipment
that is proving technically competent and is making gains in
the marketplace. Our control lists are woefully outdated. And
any updates to the Wassenaar control list take far too long to
be implemented here.
Recent example, the 2008 Wassenaar review list, the U.S.
just published a few weeks ago, over 11 months after list
changes were made. Is this acceptable? I don't believe so.
Controls are published as multilateral, but they must be
multilateral in more than just their formal sense.
Implementation should be similar among regime members so
American companies are not always at a disadvantage.
Our competitors, including those in regimes and outside of
regimes, are not subject to cumbersome multi-agency review
process and conditions of approval that U.S. exporters are.
Conditions are a problem for many U.S. exporters. Among our
customers, for example, we have instances of identical tools
with identical capabilities next to one another on a factory
floor but with different license conditions.
This is crazy. I have got one with a pink bow, a red bow, a
green bow. And depending what day it is, you can do this or
that.
Finally, as technology and economies become more complex
and intertwined around the world, the need for clarity and
simplicity becomes even more imperative in an export control
system. Our Cold War-based system implemented under IEPA is too
creaky and unwieldy and, as the National Academies has pointed
out, benefits no one but our competitors and adversaries.
In closing, Mr. Chairman, we are encouraged by the current
appetite for change among all stakeholders. The stars are
aligned as never before among Congress, the Executive Branch,
academia, and industry. We hope and urge that this concurrence
can produce an export control system that serves the interest
of all of us.
I urge you to move forward to develop legislation that
indeed protects the national security of the United States
while enabling our global competitiveness.
[The prepared statement of Ms. Murphy
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Chairman Berman. Well, thank you. Thank all of you very
much. You have all touched on important aspects of this with
slightly different perspectives. And it has been very helpful.
We are not on a clock or anything, but maybe we will just
sort of self-ration ourselves, which is dangerous when you deal
with Members of Congress, [laughter] in terms of questions and
perhaps have a few rounds, rather than asking every question I
can think of before I yield to the next person.
I have some questions I have based on the prepared
testimony. But something that occurred to me in the context of
your testimony, Dr. Hennessy, and Zoe Lofgren's discussion of
deemed exports, in the late 1990s, everyone now is focused on
Iran's nuclear program and their missile program. But this was
an issue as far back as the late 1990s.
At that time, one of the concerns was that Russian
institutes were training Iranian students in some of the state-
of-the-art technologies that they had and that as part of the
desire for funding, it wasn't even so much of a calculated
policy approach or to ensure you want to have technology but
simply to finance the institute's work and pay the salaries of
professors and all of that.
This line of basic research versus training in the
knowledge of specific technologies that would have relevance
for WMD programs or the means to deliver them, could you talk a
little bit more about some of your thoughts on that?
Mr. Hennessy. It is a very important area, obviously, Mr.
Chairman. I think we neither seek from the university
perspective to see people enter this country that would be a
threat to the country. We don't want them as students. We don't
want them as visitors. So I think an adequate visa screening
process is certainly appropriate there.
We also by focusing our research on what we truly believe
to be basic research; that is, research that is intended to be
published, we believe, that that simply excludes the university
from working in certain areas that would create the kind of
example that you have alluded to here between Russia and Iran.
So, for example, in the case of building a highly precise
telescope to go up in a missile, we are not dealing with the
issue of how to design the missile or how to control it. We are
simply designing the instrument that will ride atop that
missile.
In fact, we don't need to have specific details about how
the missile works. We may need to know some things, like how
much vibration and stress will be induced on the satellite for
the purpose of designing the satellite, but we don't need to
know the kinds of details that would be important, for example,
to an individual who might be interested in using that to build
a missile to attack the United States.
Chairman Berman. Your research council that you co-chaired
concluded that many of our current export control regulations
no longer meet the country's needs. And that was a theme also
of other witnesses here.
Because of that, the current system impedes our national
security and thwarts our ability to compete, even as you
acknowledge that we do still need export controls. This is sort
of the heart of the question for us as we embark on this
process. Dual-use technologies by their nature can be used for
benefit and for harm.
So I'm curious. How did your committee deal with sort of
the fundamental question, what are the criteria that should be
used by us, although I think the last thing we want is Congress
writing the lists, maybe on campaign technologies but not on
the process for who write the lists, what are the criteria that
should be used to determine what should be controlled? This I
think is almost essential for what we want to try and do here.
Mr. Hennessy. I agree 100 percent. It goes to the heart of
the question. What should be controlled?
I think here I would completely support what Dr. Potter
said. We need to build very high walls around a set of very
dangerous technologies, particularly related to weapons of mass
destruction. That is the clear case that we absolutely need to
deal with in our export controls. And we need to ensure that we
are doing that in a way that is as effective as possible.
There is a related set of truly dual-use technologies, as
opposed to certain technologies, which are really only for use
in devising weapons. There is a set of related technologies
that are used perhaps not for weapons of mass destruction but
related things. That is where we begin to get into an area
where you need a rational way for dealing with it.
I think one of the difficulties you see with the lists is
that they tend to grow, they don't tend to shrink very much. So
things go on the list. They never or rarely come off the list.
That obviously impedes both our ability to do our work as
well as our competitive interests. And so a rational method
that would, for example, sunset the list, forcing a review
based on some methodology, as opposed to simply taking the easy
way out, which is you leave things on the list, I think would
be a rational approach to try to deal with that problem.
Chairman Berman. Dr. Potter, any thoughts on this?
Mr. Potter. Well, I agree with what Dr. Hennessy just said,
particularly the part where he agrees entirely with me.
[Laughter.]
I think, indeed, it is important to distinguish those items
which are dual-use WMD-related and the much, much larger
category of strategic items, which when I read the----
Chairman Berman. Stop right there, though. If I were to
take a list of, say, the Nuclear Suppliers Group, I would find
technologies are directly for a nuclear weapons program, but
wouldn't I also find dual-use technologies on such a list as
well?
Mr. Potter. That is correct. I mean, you have basically two
lists for the Nuclear Suppliers Group. The one that was
adopted, I think in 1992, focuses on dual-use nuclear
technologies.
And so I don't want to suggest that you will not have
difficulties in defining where you are going to want to retain
controls, but it is still the case that those items constitute
a very, very small fraction of exports. And you have a
relatively small number of countries who are involved in
commerce in those items.
So my sense is that the thrust of the NRC report really
were related to those items which were not the focal point of
my discussion, which was WMD-related. I think that distinction
is probably a good starting point in terms of where you are
going to be able to make meaningful reform.
The greater difficulty is probably not in the nuclear
sector, where the technologies have not been as dynamic. And so
I think the lists basically that have served us well in the
past continue to be for the most part useful.
You have more difficulties when you move into the
biological sector. And so you may also note when I talked about
the international regimes, which I thought generally have been
doing a good job, I did not include the Wassenaar agreement
because it moves away from my own focus on WMD technologies,
equipment, and material.
Chairman Berman. I think for this round, I would like to
ask one more question. Then I will pass it on to Mr.
Rohrabacher. Go ahead. Yes, please?
Ms. Murphy. I sort of want to comment on----
Chairman Berman. Come into this, absolutely.
Ms. Murphy [continuing]. The control list philosophy.
Chairman Berman. Absolutely. Absolutely.
Ms. Murphy. So I think that the control list should be--
those items which you can control. So if there is no foreign
competition and it has been identified as critical for the
manufacturing of weapons or non-civilian products, then maybe
that item should be on the list.
However, what is happening in the semiconductor device
industry is that our customers are requiring us to achieve more
and more devices in smaller and smaller spaces. And a lot of
the materials that we are required to use and even some of the
parts and components, such as items on the nuclear and chemical
list, like baratrons and specialized valve and pressure
systems, are on our machines now because those items achieve
the results that our customers require.
So no longer can you look at a piece of semiconductor
equipment and see 100 percent dual-use items contained on the
machine, but as our customers require more and more solutions
to their problem, we have to seek what I would call better,
tighter restrictions or tighter specifications on some of the
delivery systems and especially some of the materials.
And so I think that it is important to also acknowledge
these requirements on clearly Applied Materials' and other
companies' desire to have legitimate end users who make
commercial products for civilian use.
Chairman Berman. Dr. Potter, how would you deal with that
very specific example?
Mr. Potter. I think it is important to start by asking what
the purpose is of export controls. And you have alluded to that
in your opening remarks. This is something that also is
addressed in the National Research Council report.
I see export controls, first and foremost, as making it
more difficult for some state and non-state actors to acquire
military capabilities that could endanger U.S. national
security. And although they may have the effect of impeding
some legitimate U.S. exports, I think it is important that
efficiency not be the only touchstone for determining what
should constitute our reforms. I think one also has to talk
about effectiveness. I mean, economic cost is certainly
important, but it is not the only criterion.
So I don't have a magic bullet to offer here. In some
respects in the nuclear sector, it is even more complicated
because you have Article 4 of the nonproliferation treaty,
which also points to the inalienable right to peaceful use. And
many countries will argue that they are not, in fact, being
provided with the nuclear assistance to which they are
entitled. So this simply further complicates the issue.
I would argue that, by and large, in the nuclear sector our
export controls, including those in the international sphere--
for example, the Nuclear Suppliers Group--have served us well.
And so we need to be very, very careful in the name of reform
not to inadvertently act in a fashion that compromises our
national security in the weapons of mass destruction sphere.
So it is more of a principle. I can't give you a more
specific response.
Chairman Berman. Shifting away from the nuclear, but let's
take one of your examples, Dr. Hennessy. You talk about
Professor Falco's work on plague vaccine and the obstacle that
he ran into when security was tightened. It is a compelling
story, but isn't there a case to be made that, especially with
the plague, security needs to be tighter on that kind of
research?
Mr. Hennessy. I agree, Mr. Chairman, that there is a case
for tightening security. Had he been working with the actual
pathogen itself, then I think there was a very good case for
it. He is working with a non-pathogenic version of the virus,
specifically used in the design of the vaccine.
So there is a lower level, particularly, of security. And I
think the key is to distinguish these extremely complicated
cases. And I think we all have to agree that when we get into
these kinds of issues, we are getting into issues where we need
a level of expertise that is very hard to find to judge how to
structure----
Chairman Berman. The kind you normally find in Congress. I
understand. [Laughter.]
Mr. Potter. I think that Karen made a point which applies
to this case as well as others. And that really is the need for
much greater cooperation among government, industry, and
academe. If there is a readiness to try to be creative to
address the legitimate security concerns as well as the obvious
interests in academic freedom, then in most instances, one can
find a reasonable solution.
I think you mentioned, President Hennessy, that Falco
viewed it as incompatible with his research approach. I mean,
that may be the case, but at many universities, there is work
being done on these issues, and we have been able to satisfy
also the export control requirement.
One can point to other cases at other universities where
there have been clear violations. And most people would agree
that the rules should have been followed and when they weren't,
that there should have been consequences.
So I think the key here, really, is the spirit of
cooperation, an attempt to reduce the bureaucracy where it is
unnecessary. There is a great deal that can be reduced, but
also there is an educational role here.
It is really important for those who choose to work in
areas where there are these restrictions to better understand
the restrictions and to also understand the reasons why there
are restrictions. Nonproliferation awareness is crucial. And I
don't think that, for the most part, industry and research on
campuses have adequate access to that information and
awareness.
Chairman Berman. Mr. Rohrabacher?
Mr. Rohrabacher. Thank you, Mr. Chairman.
As usual, I don't think the issue is as complicated as is
being presented. It is just that it requires tough decisions
and requires us to be brutally frank about who is our enemy and
a potential enemy of the United States and who isn't.
See, so far we have talked about how difficult it is to
identify which technologies, et cetera, but if we, instead,
spend our time and effort focusing on trying to identify which
countries should have the controls, that takes a lot of
pressure off identifying which technologies if you believe in a
relatively free trade with certain people as long as the final
destination is that country.
I am just going to ask the panel ``Yes'' or ``No.'' Would
you agree that reforms that loosen control over the export of
our technologies, which loosens those controls to democratic
and friendly countries, while maintaining controls and perhaps
even expanding them on countries that are controlled by
tyrannical regimes that may be hostile to America's national
security interest is an acceptable approach as how to go
forward with looking at these export controls? Basically I am
asking you if----
Mr. Potter. I would say that here simplicity is,
unfortunately, not helpful. [Laughter.]
I am not sure how you characterize non-----
Mr. Rohrabacher. So you are a no. What are you? [Laughter.]
Mr. Hennessy. I am in favor of more complexity in a
complicated issue.
Mr. Rohrabacher. You are a no. [Laughter.]
Ms. Murphy. I am not authorized to answer that question.
[Laughter.]
Mr. Rohrabacher. Well, let me just note if we are talking
about Adolf Hitler or Joseph Stalin, there wouldn't be any
laughs in the audience right now.
Mr. Hennessy. Right.
Ms. Murphy. Right.
Mr. Rohrabacher. No, no. Let me. It is my time. Let me just
note that in China, you have religious figures to this day that
are being put in prison and the Falun Gong end up being put in
these cells and they disappear. And we know what comes out of
those prisons: The sale of human organs.
We are dealing with a ghoulish regime here that a lot of
people are making profit off of. What is troubling me most
about this issue is that we are treating China like we would
treat Belgium or England.
The fact is we have a potential adversary that is the worst
human rights abuser in the world, but we have companies that
are making enormous profits, short-term profits, by taking our
technology over there and improving their capabilities.
My theory about the technology that we are talking about
that they have in China now that you just talked about is that
you can trace it right back to some American capitalist who
went over there to make a short-term profit or it can be traced
right back to research that we financed by the United States
Government somehow getting over there. But now you don't have
the technology, and they do.
Well, I don't mind that when it comes to the English. I
don't mind that if it comes to the Italians. I don't mind if it
comes to some democratic country. But when you have a country
that is still run by a group of people who throw people in
prison for their religious convictions, a country that still
looks at the United States as its long-term enemy, then there
is something wrong.
I think that we had better start discriminating about which
countries we treat as our friends because we treat our friends
the same way we treat our enemies. Our enemies are going to
take advantage of what we give them.
Back to your example, Dr. Hennessy, do you realize that
Chinese students--have you ever read anything that Chinese
students have been used by Chinese military intelligence to
accomplish their goals?
Mr. Hennessy. I am aware of that.
Mr. Rohrabacher. Okay. And still you can make a statement
to this committee that you are not going to discriminate
against Chinese students?
Mr. Hennessy. We are not going to take on research that
would require us to exclude some students from the research
program.
Mr. Rohrabacher. Yes. And the one you were complaining
about if I read it correctly was based on a DARPA grant.
Mr. Hennessy. Correct.
Mr. Rohrabacher. Okay. DARPA is what----
Mr. Hennessy. Defense Research----
Mr. Rohrabacher. Defense. My gosh. There is a relationship
between defense and that grant. And you are complaining that we
don't want to have Chinese students that will then take their
knowledge back and be utilized by the world's worst human
rights abuser?
Mr. Hennessy. I think I am illustrating the difficulty that
occurs in deemed export. The opportunity, then, is to conclude
that you shouldn't do this kind of basic research in a
university setting if you believe it really represents a threat
to the country's security.
Mr. Rohrabacher. Well, I would suggest that universities
need to think that they are patriotic Americans, too, and that
when we are up against an Adolf Hitler 10 years down the road,
that yes, maybe it is a good idea that the American
universities are helping build our capabilities. Don't you
think that is true?
Mr. Hennessy. I absolutely believe that. And I think you
only have to look at this country's history to see that, in
fact, academic scientists----
Mr. Rohrabacher. Well, that is not consistent with what you
just said. You know, the fact is that American universities
don't have to worry about what we are building, the technology
advances that we have as a country, and the competitiveness
that we will have by that if, indeed, we are ensuring that that
information isn't going to people who hate the very ideals that
represent the heart of America.
Scientists, university people are not citizens of the world
because part of that world are people who are hostile gangsters
who are murdering their fellow citizens to stay in power. The
United States of America has higher ideals than that. And
hopefully people in academe and hopefully people in the high
tech industries understand that.
Now, what has happened from my perspective--and I have been
following this for 20 years--is we have got so many
corporations going over there to make short-term profit that we
can't make those decisions. And all of this inability to set
different standards for different kinds of countries comes down
to that: Money.
Am I wrong that a lot of these big corporations finance
this university and that that may be impacting decisions on
what we can do to confront the possible hostile intent of China
in the future?
Mr. Hennessy. That is not a correct statement.
Mr. Rohrabacher. Okay.
Mr. Hennessy. While we do have money from various
companies, the vast majority of our funding does not come from
industry.
Mr. Rohrabacher. Right. So there are not grants that have
been brought in by major corporations to your university?
Mr. Hennessy. There are grants from companies, but it is
vastly overwhelmed by both the universities' own research
dollars as well as, of course, research dollars coming down
from the Federal Government.
Mr. Rohrabacher. Not just this university, but I have seen
this throughout our system where, time and again, we have these
big corporate interests that are going over there to make a
quick profit, by the way, at the expense of the American
worker, who now doesn't make as much money because they have
set up competition overseas.
And those same companies were supposed to influence the
Chinese to make them more democratic. That was the theory. But,
instead, what we have done is we have allowed them to use their
influence economically and otherwise to influence our policy
right here in this country.
And I think that this hearing is getting right to one of
the very heart of the matter, that we are unable to set things
up in a way that will prevent the Chinese, which is a potential
hostile government to the United States, actually is hostile,
maybe a potential enemy of our country, that it is impossible
for us to differentiate between that and democratic countries.
That is what is not working for us right now. That is why it is
so complicated.
And, Mr. Chairman, I will just note that I have gotten
passionate about the issue again. And I exposed myself. But I
do feel passionately about it.
Chairman Berman. I know you do. I just will interject here.
We had during the Cold War, my recollection of export control
policies, the organization COCOM, which predated Wassenaar,----
Mr. Rohrabacher. Right.
Chairman Berman [continuing]. Was about saying that there
were certain countries for which we will not send certain kinds
of dual-use technologies. But I do wonder as you carry out that
logic, does that mean that universities that want to do the
kind of research that Dr. Hennessy talked about don't take
Chinese students?
And, by the way, my recollection from 1989 was ones of the
strongest forces for the democracy movement in China that
culminated in Tiananmen Square was Chinese students who were in
the United States at that time and who did not let us and
Congress forget about what was going on there, the nature of
their repression. I mean, in other words, the question is, how
do we take what you say, which bears I think a lot of truth,
and extrapolate into a logical policy that helps?
Mr. Hennessy. Let me just say none of us is naive about the
issues we face here. As a board member of the company you
earlier praised, Google, and as the president of a university
who had one of its undergraduates' account's hacked by this
attack, a young woman who has participated in the free Tibet
movement, we are not naive about it. We understand there are
real challenges there.
Whether this country decides it needs to engage China or
keep China at a distance I think is an important topic to
discuss at the highest levels.
Mr. Rohrabacher. Let us know this. If we have a student,
Mr. Chairman, if a student comes here from China and he is a
graduate student, and we are giving him the training and the
access he needs to produce great things and he goes back to
China, what we have done is subsidize China to the tune of
hundreds of millions of dollars of research that that Chinese
Ph.D. student now knows and can duplicate.
Some of the competitiveness that we were just talking about
comes from the fact that we have provided our economic
adversary and an adversary to our democratic ideals with this
type of treasure that we have invested in----
Chairman Berman. Zoe, let's give him a green card.
[Laughter.]
[Applause.]
Mr. Rohrabacher. All right. Thank you, Mr. Chairman.
Chairman Berman. Anna?
Ms. Eshoo. Thank you, Mr. Chairman.
I said in my opening statement how important congressional
hearings are. And for anyone who is in the audience who has
never been a part of one, you are getting a real earful. You
are being exposed to the various views that the Congress holds.
And I think that it is healthy.
Having said that, it was not that many years ago when we
all celebrated the triple birth to the Rohrabachers, triplets.
And now I don't know whether they will eventually want to apply
to Stanford or not.
Mr. Rohrabacher. Oh, no. [Laughter.]
Ms. Eshoo. At any rate, thank you to our witnesses. What
you have said is enlightening all the way around. Dr. Hennessy,
from an academic standpoint, a scientific standpoint,
unclassified materials, and how we grow that but also protect
our national security.
As you said, no one here is naive. We are all patriots. We
are all patriots. And in reauthorizing this and writing all the
new protocols that guide us, there will not be any naivete
built into the legislation. We owe that to our great nation.
Dr. Potter, the spotlight that you placed on WMD and your
extensive experience in this area is really invaluable to us.
And to Ms. Murphy, from a commercial standpoint and from a
company that is very important, not only here but to our
country and around the world, your testimony is extraordinarily
valuable, too.
I should add that there was an important announcement that
that Secretary of Energy, Secretary Chu, made this morning. And
I can say something about it because it was embargoed only up
until 9 o'clock a.m. Pacific time. And that is that there are
more than $37 million for next generation lighting. And
obviously that creates opportunities for energy savings and
manufacturing jobs. And Applied Materials will benefit
significantly from that. So congratulations to you.
What each one of you said, there were an awful lot of heads
that were nodding. So as we take your individual slice of this,
we agree with you. I agree with you anyway.
I would like to mix it up a little bit. Where do you
disagree with each other? Is there a disagreement? That would
be helpful to us in how we draw this up.
I would like to give some credence to what Mr. Rohrabacher
is saying. I wouldn't state it the same way, nor do I think
that at this stage of life on this planet that we can afford
isolationism. On the other hand, there are non-state actors and
others obviously that are actively plotting and planning
against us. That is my intelligence hat. I know that. I am not
naive about it. We can build in the safeguards, I believe, to
safeguard our country.
Where do you disagree with each other? Is there something
in the testimony or knowledge that you have? Well, I am just
asking you to kind of mix it up and maybe raise some red flags
about what someone else said.
And this is all in a professional setting. So no one is
going to take offense. But I think that it would be helpful to
me and to the members here and those that are going to draw up
the legislation because it is all part of the record.
Who would like to go first? Dr. Potter?
Mr. Potter. Yes. I found the NRC report, which----
Ms. Eshoo. Can you move your microphone just a little
closer so everyone can hear you?
Mr. Potter. Excuse me. I thought that the National Academy,
National Research Council report was, by and large, right on.
And I think that Dr. Hennessy and Brent Scowcroft deserve a
great deal of credit for it.
I would have preferred had there been a greater focus on
how one could improve export controls in the WMD area, which I
realize was not the principal orientation.
Ms. Eshoo. Yes. That was not the focus of their report,
though.
Mr. Potter. Right. The one area where I would take
exception has to do with the support for the creation of an
economic competitiveness exemption, which would eliminate, as I
understand it from the report and from subsequent discussion,
export controls on dual-use technologies where they or their
functional equivalents are available without restriction in
markets outside of the United States.
In my view, that recommendation, if implemented, would both
be at odds with some international nonproliferation regimes to
which the United States is party, and would also if it applied
to the WMD area be foolhardy if a major U.S. national security
goal is to make it more difficult for state and non-state
actors to acquire sensitive WMD-related materials and
technology.
These export controls may not preclude the acquisition by
other states of their desired technology, but they may raise
the costs and increase the time. They may have to go to
countries whose products are not regarded as highly as U.S.
products.
And so, if you wanted to put this more crudely, just
because others are willing to sell us rope to hang ourselves, I
don't think that means we should sell them the rope and make
their task easier.
You asked. I mean, you are trying to be provocative, stir
things up. And, while I would agree with a very large number of
the recommendations, both in the NRC report and in Dr.
Hennessy's testimony, we have to be very careful not to give
all of our attention to economic competitiveness without also
bearing in mind other threats to national security,
particularly in the WMD area.
Chairman Berman. Would you yield?
Ms. Eshoo. I would be glad to, Mr. Chairman.
Chairman Berman. Wouldn't Dr. Hennessy if he were speaking
right now say, ``Well, we never intended that this exception
apply in areas where we are parties to international
agreements, treaty obligations,''----
Mr. Hennessy. Correct.
Chairman Berman [continuing]. ``Maybe even more informal
groups, that that exception would trump controls for which
there is a multilateral consensus''?
Mr. Hennessy. Correct. I think that is a correct
interpretation. And, as well, neither would this exemption,
this competitiveness exemption, apply to truly strategic
weapons materials. I don't think that was ever the intention as
well.
The intention was to provide a rational way of dealing with
the export controls around truly technologies which have true
commercial use outside of that. And I think that was it.
I think, responding to Congresswoman Eshoo's question, I
think the place where we would have an intensive debate, I
suppose, would be when we got to various dual-use issues in the
biological sphere. We have not had a large-scale international
biowarfare attack on the U.S., either by a non-state actor or
by a state.
The difficulty in the bio area is that essentially many of
the core technologies other than, of course, the organisms
themselves, are dual-use in nature. And that makes it extremely
difficult.
If you want to be manufacturing drugs, you need to use
certain instruments, which, of course, could also be used to
manufacture biowarfare agents.
That is an extremely difficult area and one that has to be
carefully looked at. It is one where the academic community and
the scientific community have done some self-policing. And I
think that perhaps gets back to something Dr. Potter said
encouraging the use of the community to actually act as a self-
policing strategy with respect to certain technologies.
Ms. Eshoo. Ms. Murphy?
Ms. Murphy. It is hard to analyze the other speakers'
testimony because, again, Applied Materials and most of the
commercial companies, even here in the audience today, are not
in the business of weapons. Our customers are not necessarily
in the business of manufacturing weapons or delivery systems.
Our customers are making equipment or devices that are the
display, the televisions, the solar panels. And even the chips
that most of our customers build with our machines are for
computers, communications, your cell phones, and other types of
electronic equipment used for a variety of commercial uses.
Even I think my refrigerator has more chips in it than my old
microwave oven did. So it is just becoming more and more, our
cars with a lot of the devices in them today.
But, again, the goal, again, is, really--I think some of
the other comments--and I am sorry Mr. Rohrabacher left the
room. I mean, we do have sanction availability to specific
entities of concern. And we can't be scared to use that.
Export control legislation, this usually ends up happening
that we get to this point, and we can't argue that this is a
very complicated area--we don't want bad people to make things
that will be of harm to the U.S.
So we do have sanctions available that we should use and
lists of entities of concern that we can use as well in harmony
with a rationalized control legislation.
Also, we touched on immigration, which is not a purview of
this committee, obviously, but those regulations as well,
again, need to be in harmony to prevent----
Chairman Berman. We do have the chair of the Immigration--
--[Laughter.]
Ms. Murphy. Yes, I know. We visit her all the time as one
of our employees was also impacted by being arrested and
impacted by issues around immigration. Again, students and
other people who come to the U.S. under temporary permissions
should be able to stay here quicker under legal programs, such
as permanent residency and citizenship.
So, export controls should not be the focus of these other
very complicated issues, such as sanctions and immigration. We
still need a rationalized export control program that truly
deals with the dual-use and commercial commodities.
Ms. Eshoo. Thank you.
I just have two other quick questions. Based on the
testimony relating to the private sector and the university
community, do you think, Dr. Hennessy, that they should be held
to separate sets of export control laws and regulations? Would
that help to bring a much clearer definition to the roles?
Mr. Hennessy. It probably would because obviously there are
different concerns that----
Ms. Eshoo. Right.
Mr. Hennessy [continuing]. And different issues that come
up. And I think what the universities really want to ensure is
the freedom of research around basic research, fundamental
research, and less so about applications of various pieces.
Ms. Eshoo. Something that hasn't come up in the testimony,
we haven't mentioned it here at the dais, and that is that the
agencies that are charged with the responsibility of carrying
out the export control laws that we have, State Department and
the Commerce Department, both very different in terms of their
missions.
Is that where all of this should be? Should they continue
with their shared responsibility? Should we be looking at a new
model? Has anyone given any thought to this? And if so, what
might you suggest?
Mr. Hennessy. I think there has been some thought about it.
And I think what I would say is the current shared authority
results in far more complexity and complication----
Ms. Eshoo. Right.
Mr. Hennessy [continuing]. Than is necessary, I think, to
do a good job with export controls.
Ms. Eshoo. Anyone else?
Ms. Murphy. Yes. I believe it is touched in my testimony,
the fact that, again, our partners in the regimes don't have
the multi-agency. It is kind of a one-stop shop. They do seek
expertise from their laboratories and their experts in defense
community when making those difficult decisions.
Ms. Eshoo. Who has the best model, do you think?
Mr. Rohrabacher. Don't say Germany.
Ms. Murphy. Don't say Germany?
Ms. Eshoo. Don't say China. [Laughter.]
We are going to have the Fourth of July here.
Ms. Murphy. Actually, I have been having very good
experience with the Singapore government, who is not in the
Wassenaar arrangement. Their Customs authority is the group
that handles export licensing. And we have been having some
very good discussions with them; and then maybe, secondarily,
the U.K.
We have good discussions with them when we find we need
export controls from their agency.
Ms. Eshoo. Thank you very, very much. Thank you, Mr.
Chairman.
Chairman Berman. Zoe Lofgren?
Ms. Lofgren. Well, thank you, Mr. Chairman.
It is interesting what seems obvious and we all agree on
when you get down to the details becomes more difficult. And I
think this is a prime example of that.
You know, in terms of controlling the export of material
from the U.S., I think all of us agree that that is a burden
and it is a burden that needs to be assumed if there is a
benefit. The question I guess really can go, is there a benefit
of any value that would justify that burden?
I remember hearing Dr. Hennessy a few weeks ago saying it
is the buy it at Fry's standard, which is something I have
actually used on the floor of the House. If you can buy it at
Fry's, it is too late. So it goes to not only what is on the
list but how fast that list changes.
At one point, a Sony PlayStation had too much computing
power to be exported. And no one agreed that that was sensible.
And, yet, it was impossible to change in any prompt way.
So I think some of what needs to come out of this change in
the legislation is a system that is agile and quick, I mean,
that is accurate but doesn't take forever so that the
technology has moved so much faster than the government has and
that also that it has to be some way to inform the decision-
makers about the technology.
We had big fights on MTOP standards and is that the right
standard and supercomputers. Meanwhile the world moved past
that into network computers. So the argument was meaningless.
And, yet, we continue to hamper ourselves for no good reason.
The burden did not yield the benefit and security of the
U.S. So I am hopeful that we can come up with some way, perhaps
even the National Academy or the Research Council, who there is
no way the government itself is going to necessarily possess
the breadth of that information, but there ought to be a very
meaningful advisory capacity that helps us avoid those
mistakes.
In terms of--and I want to get back to the deemed export
issue and what this means for universities today and where it
leads us to. It has been interesting. Now, we know that if we
are going to remain the first, we have to get the best minds in
the world into our university systems and, to the maximum
extent possible, allow those brightest people in the world to
become Americans and be part of our team. That is part of our
strategy for success.
We have touched on the immigration issues that we hope to
remedy, but part of that is, how do you compete for the
smartest people in the world?
Now, if you take a look at the universities--I mean, I
don't want to give a whole list but Stanford and University of
California and Harvard and M.I.T.--and others are others--are
among the top universities in the world. And, yet, I have
noticed in terms of competition for the elite minds of the
world, we are now getting competition from Australia and
Britain and other places for a variety of reasons.
What role does the deemed export rule have in terms of
being able to attract the very top? I am not talking about
undergraduate, but for your Ph.D. programs, what role does that
have in the competition for the elite scientific minds in the
Ph.D.-level student competition, Dr. Hennessy?
Mr. Hennessy. I would say that students don't immediately
see deemed export. They see the normal visa process as the
thing they encounter. And I must say there have been a lot of
improvements in the visa process since the difficult days that
occurred as quite predictable after 9/11, but we would have a
difficult time, student visas. But there has been a lot of
improvement in that.
One of the lingering difficulties around visas is that
there are still significant problems for short-term visitors
coming to attend a conference. The result has been that a
number of agencies have moved major conferences outside the
United States. That means A) we are less well-represented at
that conference but also that we don't send graduate students
to international conferences. So our participation of our young
people in that conference is hurt.
The more immediate difficulty of deemed export, then,
becomes when we are doing a research project that has the
potential of a deemed export control around it. It simply makes
it impossible for us to participate in that research because we
would not only have to have the students undergo, essentially
provide all of the information for a background check,
international students, but they would be prohibited from
talking to other students, they would be prohibited from having
an open research group meeting, where a student who wasn't
cleared couldn't come into the meeting and participate in the
meeting. They couldn't discuss it with their fellow students.
So all of the things I think that makes the U.S. academy work
so well in terms of its intellectual vitality would break down
if we started doing a lot of research that involved deemed
exports.
Ms. Lofgren. So essentially the universities are going to
have to withdraw from an element of basic research?
Mr. Hennessy. That is what basically happens. We basically
don't do it or we at least try to limit it or we will try to
find an industrial partner that can deal with that aspect of
the research.
One of the things that became quite a concern a few years
ago was the notion that all uses of potentially export
controlled equipment would be controlled. That would have
basically prevented foreign students from walking into a large
number of our laboratories in the biological sciences and
chemistry and engineering and using the equipment in pursuit of
perfectly legitimate basic research that had nothing to do with
an export controlled entity, but because the instrument itself
was export controlled, the use of the instrument would be
covered by deemed exports.
Ms. Lofgren. As mentioned, this is complicated stuff, but
it seems to me that if we want to stay number one, we have got
to find a way to make sure that the top minds in the world want
to come here and be on our team. And getting this right is part
of that answer.
So I thank you, Mr. Chairman, for your work on this. And I
look forward to not only following it but hopefully playing a
positive role as we put together a sensible response to these
challenges.
And I yield back.
Chairman Berman. Well, thank you. I notice it is 12:30. I
have about 3 hours of questions left, but I think I am going to
try and contain myself and follow up with some of you as
individuals on some of these issues.
Do any of my colleagues want to get into--I mean, we really
just, I think very helpfully, scratched the surface of this. I
would love to, but this is not the last. It is the first, but
it is not the last, of these hearings. And I thank you both for
helping to, in many ways all of you to helping to, join the
issue for us, understand some of the ideals we are going to
have to face.
And I do want to make special note because I think Dana's
comments about China, this will not be the last time that issue
is raised. For one thing, Dana is going to still be around.
[Laughter.]
And, secondly, it is going to be on people's minds. And
even the events of the last couple of days have renewed that.
Finding a sensible way through all of that and what is really
effective, as opposed to what might feel good or something is
very important for us.
Just on the issue of how do we in the U.S.--this is not the
subject of this hearing, but the Internet repressive regimes
and how should we react to them. They are different approaches.
I think it is something our committee has to take another look
at.
We have actually systematically questioned information for
a number of companies, many in this area, on their concerns
regarding joining the global network initiative, which
advocates the companies adopt corporate responsibility
guidelines and collaborate with human rights NGOs to push back
on some of these Internet repressive regime demands. I think we
have to look at this more, but meanwhile we are going to
proceed ahead with looking at the Export Administration Act.
I came to Congress in 1983 and went on the Trade
Subcommittee. And, actually, you are right. The real reform of
this, the real act was done in 1979, in Carter's last year. We
made one reauthorization effort, did some changes. It was a
very arduous process in 1985 and '86.
And I remember the fight was very much defined by the
notion that you could not export an embedded microprocessor.
But the Counsel General for the Soviet Union could walk down
the street to the nearest toy store in San Francisco and buy a
bunch and take them back with him when he went home.
But it is a different time now. And that is where your, Dr.
Potter's, I think, presence here is very important. There are
still hugely critical national security issues we have to deal
with.
Thank you all for coming. We appreciate it. And, with that,
the hearing will be adjourned.
[Applause.]
[Whereupon, at 12:32 p.m., the hearing was concluded.]
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