Manufacturing Industry

Deemed export report rankles industry

Manufacturing & Technology News, Feb 28, 2008

The recent recommendations made by the Commerce Department's Deemed Export Advisory Committee will have a "significant negative impact on U.S. technological leadership" and should not be adopted, according to a group of 12 large business associations. The coalition, led by the National Foreign Trade Council, said the committee's recommendations would lead to a "logjam" in export licenses and would increase the number of denials of licenses for foreign nationals from a larger number of countries. This "would accelerate the shift overseas of industrial technology research and development," says the group in a Feb. 15 letter to Commerce Sec. Carlos Gutierrez.

The Deemed Export Advisory Committee, led by retired Lockheed Martin CEO Norm Augustine, did not narrow the list of dual-use technologies that need to be controlled by regulations nor did it clarify the criteria needed for revising the control list. "Without such guidance, the interagency process is unlikely to make any significant reduction in the scope of the technologies covered," said the group.

The recommendations could also lead to having more foreign nationals being subject to deemed export controls and loyalty tests. The committee's suggested criteria for screening foreign nationals "would amount to processing Top Secret security clearances for thousands of foreign nationals, a procedure that takes months for U.S. citizens and that has been backlogged for several years," says the letter to Gutierrez.

The Commerce Department needs to "go back to the drawing board and work closely with industry in developing an approach that will produce a more balanced result," says the letter, signed by AeA, American Council on International Personnel, AMT-Association for Manufacturing Technology, Coalition for Employment Through Exports, Computer Coalition for Responsible Exports, Computer and Communications Industry Association, Emergency Committee for American Trade, Information Technology Industry Council, International Safety Equipment Association, National Council on International Trade Development, National Foreign Trade Council and the U.S.-China Business Council.

The letter is located at http://www.nftc.org/default/VISA/DEAC Letter.pdf. The Deemed Export Advisory Committee's report is located at http://tac.bis.doc.gov/2007/deacreport.pdf.>