A touchy time for US curb on key exports
In theory, someone could buy the latest, most sophisticated computer - just dandy for controlling a missile - and fly it to Moscow this weekend without breaking the law. That's because the act permitting the administration to control exports for national-security reasons expires Friday.
The White House promises that, law or not, it will prevent such strategic shipments.
Congress and the White House are entering tricky trade waters because of this temporary loss of authority to control exports. Next week both houses of Congress will work on highly controversial new trade-control legislation. In the process, members will be forced to balance the sharply conflicting goals of defense officials and corporate exporters.
''A great conflict of significant and entrenched interests'' is at work, says a top Senate Banking Committee staff member.
Although the issues involved are both controversial and complex, the outcome will affect the average citizen's pocketbook and safety, experts say. That is because ineffective trade controls can bolster Soviet weaponry. But overly stringent controls could cut off a major source of jobs. Trade was responsible for up to 80 percent of the new jobs created between 1979 and '81.
The first tough call on trade must be made by the White House. This Friday, while Congress is still in recess, the Export Administration Act expires. The law gives the administration authority to control exports to protect national security, advance foreign policy goals, or prevent shortages.
The administration could allow the law to lapse and risk, among other things, a trickle of defense-related high-technology goods to the Soviet Union. Or it could continue to control exports by invoking the Economic Emergency Powers Act, which requires a declaration that a ''foreign economic threat of an extraordinary nature'' is in progress. The law was last used during the Iranian hostage crisis.
Letting the law lapse would create ''an open ball game,'' says Arthur T. Downey, a trade lawyer and partner in the firm Sutherland, Asbill & Brennan. Possible consequences could include shipments of ''oil equipment to Libya, high technology to the Soviet Union, and (restricted) goods to South Africa.''
The Commerce Department will submit plans to President Reagan for imposing the Emergency Powers Act. ''I am not making any predictions as to what the President will do,'' says Lionel H. Olmer, undersecretary of commerce for international trade.
Another solution would be for the Senate to reverse an earlier vote and approve a measure that cleared the House extending the current Export Administration Act until Oct 28.
During a National Association of Manufacturers briefing Tuesday, Mr. Olmer warned companies against taking advantage if a lapse in authority occurs. ''Everyone expects the act will be back in effect in a very short time and we will be there to say we told you so,'' he says.
As the debate on trade controls is about to resume in Congress, a new, unpublished study casts doubts on the effectiveness of some sanctions. The study , conducted by the Institute for International Economics, examined trade sanctions used to achieve foreign policy goals. Such controls have been used by the United States against Vietnam, Cuba, and Cambodia, among other nations.
In 99 cases since World War I where various nations employed trade sanctions, they were ''most effective in pursuit of limited and modest policy goals,'' says study co-author Jeffrey J. Schott. Generally the sanctions ''don't work in big-power confrontations,'' since the trade interruption has a relatively minor impact on a large nation's economy.
The study found that trade controls do tend to work well against smaller targets. ''They are very effective in destabilizing small governments,'' Mr. Schott says.
Still, in the past 10 years the use of controls has been less effective than in the past. Some 45 percent of the sanctions imposed before 1973 were effective , compared with only 32 percent of those used between 1973 and '83, the researchers found. Among the reasons: Most countries are now less dependent on trade from one source, and more countries are now willing and able to help a nation suffering the effects of trade controls.
While the bills the House and Senate will be working on next week differ in several key areas, they both contain contract sanctity provisions that would restrict the President's freedom to control exports for foreign policy reasons.
The bills diverge sharply on control of security-related exports. The Senate measure gives new authority to the Defense Department to review exports to US allies. The Pentagon already examines exports to Soviet-bloc countries.
By contrast, the House bill lifts controls on exports to allies that maintain controls on a cooperative basis with the US. And it automatically lifts unilateral controls on exports to allies if the US government has not denied an export license for the product within a one-year period.
Although a number of other issues divide the House and Senate on export controls, staff members predict a workable compromise can be reached by Thanksgiving. ''The issues are not so intractable that we cannot find a series of accommodations,'' a key House staff member says.