PREPARED STATEMENT WILLIAM SCHNEIDER, JR., FELLOW, HUDSON INSTITUTE
PROLIFERATION AND U.S. EXPORT CONTROLS
HEARING
before the
SUBCOMMITTEE ON INTERNATIONAL SECURITY,
PROLIFERATION, AND FEDERAL SERVICES
of the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
JUNE 11, 1997
Mr. Chairman and Members of the Committee: Thank you for offering
me the privilege of testifying before this Committee today. I am
William Schneider, Jr. I formerly served as Under Secretary of State
(1982-86) in the U.S. Department of State where I had responsibility
for the management of the Department's export control functions as well
as interagency coordination of export control policy as Chairman of the
Senior Interagency Group on Strategic Trade Controls. I subsequently
served as Chairman of the General Advisory Committee on Arms Control
and Disarmament (1987-93), a statutory advisory committee. My testimony
will address the subject of the role export controls can play as a
dimension of national policy to limit the risk posed to U.S. interests
by the proliferation of weapons of mass destruction (WMD) and their
means of delivery as well as a advanced conventional weapons.
The threat posed to U.S. interest by proliferation
The nature of the Cold War limited the potential for the
proliferation of technologies associated with weapons of mass
destruction and their means of delivery as well as advanced
conventional weapons. The dynamics of U.S. and former Soviet Union's
leadership role of competing ideological blocs established conditions
which limited the degree to which the military application of advanced
technologies was proliferated to non-allied states. The implementation
of a successful multilateral export control regime (The Coordinating
Committee on Strategic Trade--COCOM) limited the flow of advanced dual-
use as well as munitions-list technology between the blocs, and in
parallel, constrained access to this technology to many non-COCOM
members as well. The limited counter-proliferation enforcement
arrangements supporting the Nuclear Non-Proliferation Treaty of 1968
was supplemented by a U.S.-led Nuclear Suppliers Group which
considerably improved the formal enforcement apparatus of the NPT.
Somewhat similar arrangements were established under the Missile
Technology Control Regime (for military missiles) and the Australia
Group (chemical weapons).
The collapse of the former Soviet Union in 1991 materially changed
the environment associated with the proliferation problem, both
increasing incentives for proliferation and diminishing the role of the
export control apparatus as the first line of defense against
proliferation. The COCOM organization was disbanded in 1994, and
replaced by a much less effective and far more narrowly focused entity
known as the Wassenaar Arrangement. In parallel with the dismantling of
the multilateral structure of export control coordination was the sharp
decline in national controls. During the period of my service in the
Department of State in the mid-1980s, nearly 150,000 validated export
licenses for dual-use products were issued annually. Successive waves
of decontrol have reduced the number of such licenses to less than
8,000 despite a much larger volume of trade. The virtual abandonment of
dual-use export controls as an instrument of public policy has been
matched or exceed by U.S. allies. As a result, the international
structure of export controls for dual-use technologies has been largely
disbanded as well. At the same time, the number of munitions licenses
has declined only about twenty percent during the same period (to about
45,000 today) despite a 50% decline in the size of international arms
market and total U.S. munitions list exports. This trend reflect an
increase in regulatory activity in the United States concerning
munitions list (i.e. defense products and services) exports.
An unanticipated consequence of the collapse of the former Soviet
Union was the centrifugal forces in international affairs unleashed by
the end of the Cold War. Regions of the World which were once primary
sources of Cold War confrontation such as the Middle East became
secondary security considerations for nations outside of the region.
The loss of activism within the U.S. national security apparatus in the
details of local security arrangements and the alliances such interests
produced a result which has been reflected in the Post Cold War
increase in the scale of the proliferation. Affected nations attended
to their own security aims knowing that the end of the Cold War
diminished the interest of extra-regional players in local or regional
security. Indigenous arms development programs supplemented offshore
procurements of defense products and services. Weaker nations sometimes
turned to WMD and their means of delivery to achieve their regional
security objectives. These developments in turn destabilized several
areas of the world.
The best known events occurred in the Middle East. Both Iran and
Iraq sought to develop their own military ballistic and cruise missiles
as well as weapons of mass destruction. In conjunction with offshore
procurements of conventional defense products, they produced formidable
military establishments posing an overwhelming threat to U.S. allies.
Iraq's invasion of Kuwait in 1990 required a vast multinational effort
to reverse, but not before it had terrorized the region's population
with ballistic missile attack and the prospective threat of weapons of
mass destruction. According to the testimony of the head of the UN's
Special Commission on Iraq (UNSCOM), despite an unprecedented UN
mandate, and more than five years of UN inspections in Iraq, the
international community has been unable to prevent Iraq from continuing
its development of ballistic missiles and weapons of mass destruction.
While UN sanctions imposed on Iraq continue, the threat posed to the
region in the short term, and to the U.S. in the medium/long-term by
Iraq's WMD/missile program endures. The loosening of the fabric of
diplomatic obstacles and political incentives to proliferate WMD/
missiles and advanced conventional weapons has produced an troublesome
post-Cold War irony--the proliferation threat to the United States and
its allies has become more serious following the Cold War than was the
case during the Cold War.
Changes in the application of advanced technology for military purposes
Throughout much of the Cold War period, the imperatives of the
military competition between the U.S. and Soviet blocs caused the
military establishment to be at the leading edge of the development and
application of advanced technology. Many developments such as high
performance computers, advanced aircraft and propulsion systems,
microelectronics, materials, signal processing, optics, space, and
others found their most sophisticated and demanding applications in the
defense sector. The underlying scientific and industrial technology
supporting the defense industrial base was also at the cutting edge of
advanced technology whose performance characteristics exceeded the
needs of the civil sector.
Under these circumstances, the civil sector was the beneficiary of
advanced technology developed for military purposes. Advanced
aerodynamic and hot section metallurgy for example, developed for
military aircraft and propulsion systems was a crucial factor in
advances in civil aviation that propelled the United States to world
leadership in the industry. The military requirements for the use of
space for large communications, weather, and surveillance satellites
created a space-launch services capability that was exploited by the
private sector albeit slowly, during the 1970s and more rapidly during
the 1980s. The military requirements in these and other fields of
advanced technology skewed the availability of these capabilities,
however. Military space launch demands limited the commercial sector to
relatively large costly satellites in space. This pattern of military
requirements produced a demand for advanced technology that was
subsequently exploited by the private sector for civil applications.
This situation began to change in the 1970s, and accelerated
rapidly since the 1980s. The driving force producing advanced military
capabilities are the civil sector's demand for advanced technologies
which are frequented exploited prior to the use of the technology in
defense applications. The requirements for advanced civil applications
of modern technology now regularly exceed--often far exceed--military
requirements. As a consequence the defense sector is now the recipient
of ``trickle down'' technology from the civil sector.
The change in the path of the development and application of
advanced technology for military purposes has been recognized by the
Department of Defense. A series of initiatives undertaken by former
Secretary of Defense William Perry has put the Department on track to
incorporate these trends into defense planning. Commercial technologies
and practices will increasingly supplement, and perhaps eventually
supplant the technologically isolated industrial apparatus surrounding
DOD-unique military specifications. This has been reinforced by the
results of the Quadrennial Defense Review whose report was published
last month. The QDR envisions a future defense posture for the United
States that will emphasize information-driven military capabilities
largely derived from advanced technologies in the civil sector.
The new path to proliferation
The threat posed to American interests by the proliferation of WMD/
missiles, and to a lesser extent advanced conventional capabilities has
become widely understood. What is not so well understood is the
changing process of applying advanced technologies for military
purposes. In the past WMD technologies, especially nuclear weapons
design, development, manufacturing, and test information was protected
by the secrecy afforded by a unique security classification process
established by statute (The Atomic Energy Act) for the military
applications of atomic energy. Missile technology was more difficult to
protect. Public policy embedded in the statute creating the National
Aeronautics and Space Administration (NASA) made dissemination of space
technologies an affirmative object of public policy. This produced a
co-mingling of military and civil applications of space which has
limited the success of the MTCR. Chemical weapons and the underlying
technologies were already well known due to their employment on an
industrial scale in World War I. Control efforts are largely focused on
containing the transfer of precursor chemicals on an industrial scale
to potential proliferators.
The leakage of nuclear weapons design technology over time has
become a flood in recent years. A telling recent example has been a
decision by the Department of Energy to release to the public most of
the computer codes associated with nuclear weapon design (apart from
weapon dynamics). These data can be purchased commercially on a single
CD-ROM and will enable potential proliferators to overcome design
problems in nuclear weapons when placed in the hands of experienced
physicists. One experienced physicist was able to add a few hundred
lines of computer code to the data released by the U.S. Government to
replicate the information needed to produced advanced fission and
thermonuclear weapons Thus, the problems facing potential proliferators
has evolved from a problem of basic scientific design to one of
industrial processes today. Access to advanced modeling and simulation
and industrial production capabilities are now the pacing obstacles to
proliferation. The crucial difference from the situation which obtained
during much of the Cold War period is that the enabling technologies
for proliferation are almost entirely found in the civil sector, not
the defense sector.
We have two recent examples which underscore the manner in which
the path to proliferation has changed as a result of the shift in the
focus of advanced technology requirements from the military to the
civil sector.
Iraq
The troublesome role of Iraq in Middle East security was widely
understood during the 1970s and 1980s. Its support for international
terrorism, its implacable hostility to Israel, and its Cold War
affiliation with many of the aims of the former Soviet Union in the
region made U.S. relations with Iraq an adversarial one. As a result,
the U.S. Government declined to sell munitions list technology to Iraq,
even during a brief period when U.S. and Iraqi foreign policy interests
overlapped in the mid-1980s (preventing Iran's military domination of
the Northern Gulf region). Although the former Soviet Union was a major
supplier of conventional military equipment, with but a few exceptions,
most U.S. allies agreed to abstain from providing Iraq with advanced
conventional weapons technology.
However, no effort was made to prevent the sale of advanced
commercial and industrial technology to Iraq; to the contrary, such
sales were promoted. Indeed, the sale of such products was seen as
offering an affirmative benefit to U.S. foreign policy in the late
1980s. Promoting Iraq's industrial and commercial development would
produce a set of interests in Iraq some argued, that would ultimately
undermine the military domination of Iraq's political culture.
Providing commercial and industrial opportunities for Iraq's aspiring
and politically moderate middle class would serve long-term U.S.
interests.
Iraq was flooded with American, European, and Asian advanced
commercial technology. This technology was diverted into a clandestine
network within Iraq's defense industrial establishment. Advanced
western commercial technology enabled Iraq to extend the range of its
SCUD ballistic missiles to enable it to become a weapon of terror
throughout the region from the Eastern Mediterranean to Iran.
Reassuring ``estimates'' of Iraq's potential for deploying nuclear
weapons of a decade or more were based on a belief in the success of
NPT-derived export controls aimed at frustrating Iraq's ability to
produce fissile material. MTCR controls were seen as effective because
no state producing long-range (>500 km.) theater ballistic missiles had
transferred such systems or components of systems to Iraq. Subsequent
events affirmed the proposition that presumption is the mother of
error.
Iraq's access to advanced industrial, not military technology from
the West permitted it to become a major security threat to the United
States interests in the Middle East. Rather than being a threat only to
its contiguous neighbors, it was able to extend the reach of its
threatening aspirations throughout the Middle East region. The
decontrol of advanced civil sector ("dual use") technology among the
industrialized nations of the world was the enabling policy change
which contributed to Iraq's indigenous capability for WMD and military
missiles.
China
Since mid-1989, the U.S. has declined to provide China with
munitions list technologies. A parallel understanding with most U.S.
allies (apart from Israel) has caused them to limit their own transfers
of munitions list technology and equipment. China's acquisition of
advanced military equipment and technology has been limited to two
sources; Russia and Israel. Russia is the only nation providing China
with integrated military end-items (e.g. Kilo-class submarines, Su-27
strike aircraft, etc.). Israel's cooperation according to press
reports, is limited to providing advanced military subsystem technology
which is subsequently integrated into end products by China defense-
industrial establishment. Illustrations of this collaboration includes
the avionics for China's F-10 aircraft now under development and
Russia-Israeli cooperative program to produce an airborne early warning
aircraft (a counterpart to the U.S. AWACS).
Despite the aim of U.S. policy to deny China advanced military
capabilities through ban on the transfer of munitions list technology
to China, U.S. exports of advanced civil sector (i.e. dual-use)
technology to China have become the enabling feature of China's ability
to modernize its armed forces. The U.S. is providing no military
technology, but is providing China with the manufacturing capabilities
to produce advanced military equipment based on military technology
obtained from other nations. An irony of these circumstances is that
because the U.S. is providing advanced civil sector rather than
military technology, China's military modernization is proceeding more
rapidly than would be the case had China been dependent on imports of
U.S. munitions list technologies.
China's ability to do so is facilitated by the manner in which
existing export controls are managed. End user verification--a routine
feature of advanced technology exports to China in the 1980s--have been
abandoned. This has permitted advanced technology imports to be
routinely diverted from nominal civil application to defense product
manufacturing processes. Moreover, the monitoring activities of the
U.S. Government have abstained from a focus on the transfer of advanced
civil sector technology to China's defense industry. The monitoring has
focused instead on the production of military systems which often do
not emerge until several years after the enabling manufacturing
technology has reached its defense industrial establishment.
The recent case of the transfer of modern machine tools to China
for the manufacture of aircraft to China underscores problems of
policy, intelligence, and enforcement of the export control function.
Advanced machine tools developed in the U.S. for the manufacture of
military aircraft, but excess to the needs of U.S. industry were sold
to China for civil aviation manufacturing purposes. China has refused
to permit end-use verification making it infeasible for U.S.
authorities to ascertain the use of this equipment. Subsequent evidence
revealed that the machine tools and related equipment was transferred
to a military aircraft production facility. This facility will produce
advanced military aircraft derived from military technologies China has
obtained from other suppliers. In the end, allied nations in Asia will
face China's armed forces able to field advanced military capabilities
in significant numbers because of manufacturing technology provided
from the U.S. civil sector.
These two examples illustrate the path most likely to be adopted by
potential proliferators; to acquire advanced civil sector (i.e. dual
use) rather than military technology to permit the development,
production, test, and support of advanced military capabilities. This
approach is abetted by the process of decontrolling the export of a
large fraction of modern technology pertinent to the production of
advanced military capabilities. This result is an unintended
consequence of current export control policy and regulation.
Recommendations for modernization of U.S. export controls
U.S. munitions list export controls under the Arms Export Control
Act are effective in supporting the aim of public policy; assuring the
congruence between U.S. foreign policy objectives and arms transfer
policy. President Clinton's Conventional Arms Transfer policy
promulgated in February, 1995 published general arms transfer policy
criteria that has contributed to the effective management of arms
transfer policy.
The more problematic area for public policy are export controls for
dual use technologies, equipment, and services. Both the Clinton and
Bush administrations have liberalized export controls on dual use
technology, equipment, and services that has had the unintended
consequence of facilitating the process of proliferating WMD and their
means of delivery as well as advanced conventional weapons. Export
control policy and regulation needs to be modernized to allow it to be
brought into alignment with public policy relating to the management of
problem of proliferation.
Export control policy
Current policy understates the relevance of dual-use technology to
the problem of proliferation. This in turn has led to very extensive
process of decontrol that has facilitated rather than limited the
proliferation of WMD, ballistic/cruise missiles, and advanced
conventional weapons technology. Export controls need to recapture dual
use technologies, products, and services relevant to the development,
manufacture, test, and support of WMD, ballistic/cruise missiles, and
advanced conventional weapons. The aim of such a policy is to limit
access of proliferation-prone end-users to dual use technologies,
equipment, and services which abet proliferation.
Intelligence collection and processing
Effective intelligence collection and processing is crucial to
successful constraints on the dispersion of advanced dual-use
technologies pertinent to proliferation. Diplomatic coordination with
nations allied with the U.S. in the counter-proliferation struggle
depend on timely and precise U.S. intelligence information concerning-
efforts by proliferators to obtain controlled dual-use technology,
equipment, and services. Systematic collection and processing of
pertinent information by the intelligence community for use by U.S.
diplomats and law enforcement personnel can have a significant impact
on the effectiveness of U.S.--counter-proliferation policy.
Export control regulatory practice
The international market for advanced dual-use technology is
important to sustaining American industrial competitiveness. The
management of export controls should not become an instrument for
inadvertently frustrating legitimate exports because of poorly
implemented regulations. Maintenance of a data-base on end-users,
diversion channels, and the requirements of proliferation-prone end
users can significantly facilitate the effective management of export
controls without preventing legitimate commerce in advanced technology.
Restoration of end-user checks for transactions involving a significant
proliferation risk is an illustration of an important deterrent to
diversion. This should be a practical measure to achieve since funding
and numbers of Full Time Equivalent (FTE) personnel in the Bureau of
Export Administration (BXA) in the Department of Commerce remains high
despite low levels of export licensing activity compared to
circumstances a decade ago. BXA has over 300 FTE to support the
management of approximately 8,000 validated export licenses. The
Department of State's Office of Defense Trade Controls issues
approximately 45,000 licenses per year with fewer than 50 FTEs.
Diplomatic support for export control management
The disestablishment of the COCOM organization in 1994 eliminated
the primary international organization to coordinate dual-use export
controls on a multilateral basis with like-minded nations. The focus of
the Wassenaar Arrangement on constraining (or in its presently limited
role, monitoring) conventional arms transfers to sensitive destinations
(primarily the ``pariah'' states such as Iran and Libya) makes it
unlikely that this institution will be an appropriate venue for the
coordination of multinational transfers of sophisticated dual-use
technologies to proliferation-prone end-users. In the interim, a series
of bilateral measures are the most likely to achieve success. If
intelligence support for U.S. diplomacy is effective, direct bilateral
diplomacy can be effective. An ability to provide timely and accurate
information on impending dual-use transfers can contain covert
procurements of controlled technology.
The expansion of dual use technologies controlled for counter-
proliferation purposes should be included in national control lists
managed by allied nations. In many cases, U.S. allies abandon most of
their national export control apparatus when the U.S. decontrolled most
advanced technology exports. Diplomatic efforts carried out on a
bilateral basis can help rebuild a ``virtual'' multilateral export
control structure despite the absence of formal institutions designed
for the purpose. This aim is facilitated by the widespread consensus
among most allied nations on the need to contain proliferation.
Enforcement and international sanctions
Sanctions against export control violations has proven to be an
effective instrument to facilitate compliance in the case of munitions
list controls. As it can be argued that the diversion of sophisticated
dual-use technology, equipment, and services to proliferation prone
end-users poses no less a long-term danger to American interests,
sanctions for noncompliance with dual-use should be no less severe than
for munitions list violations.
International sanctions for violations of export control violations
are honored more in the breach than the observance. This has
significantly diminished the credibility of sanctions. China's sale of
cruise missiles to Iran in 1996 in explicit violation of the Gore-
McCain sanctions legislation approved in the aftermath of the Gulf War,
for example, have not been imposed due to the conflict of sanctions
with other U.S. policy objectives. The widespread practice of ignoring
statutory sanctions requirements for munitions list cases makes it
difficult for the U.S. to encourage allied states to establish
effective enforcement of national export control regulations.
Interagency coordination
Post Cold War optimism about the impact of the collapse of the
former Soviet Union on U.S. security interests abroad has led to a
separation of U.S. advanced technology trade from security interests.
Interagency coordination that would permit policy management of U.S.
advanced technology trade pertinent to the proliferation problem has
declined substantially from Cold War period practice. An appropriate
interagency apparatus led at the Under Secretary level would provide a
desirable balance between regular policy oversight and flexible and
integrated management of the export control system to include all
pertinent agencies including the Departments of State, Defense,
Commerce, the NSC, the intelligence community, and other agencies as
appropriate.
* * * * *
Export controls are an important instrument of foreign policy in
coping with one of the most enduring problems of national security--the
ability of potentially hostile states to use international commerce to
facilitate the creation of a security threat to the U.S. and its
allies. I look forward to an opportunity to respond to your questions.
|
NEWSLETTER
|
|
Join the GlobalSecurity.org mailing list
|
|
|
